Former Cruise America Parent Goes Ch. 11
While the RV rental business appears healthy as a result of 30% increases in demand since Sept. 11, the car rental business is struggling, as indicated by the Chapter 11 bankruptcy filing by Budget Group Inc. on Monday (July 29).
Budget was the parent of RV rental firm Cruise America from January 1998 until it was reacquired by Randall and Robert Smalley Jr. during October 2000.
Budget sold Cruise America so it could focus on digesting its acquisition of the Ryder truck-rental business, but difficulties at Ryder, and Budget’s European car-rental business, forced Budget to seek protection from creditors under Chapter 11 of the Bankruptcy Code.
Budget is the fifth-largest car-rental company. Its executives have been in discussions for months about a possible sale of Budget to Cendant Corp., owner of Avis, the No. 3 auto rental firm. The talks will continue.
Budget is not the only car-rental firm operating under Chapter 11. ANC Rental Corp., owner of the Alamo and National brands, has operated under Chapter 11 for almost a year.