Dear RER:

The article on NationsRent “They're Back” in August RER, was disturbing. Mr. Suliman, if our company were to walk away from the vast majority of its debt, our balance sheet would be better than most other competing companies as well. Erase the debt obligation and the P&L report shines too! Is this something you are proud of? Apparently. The bankruptcy laws were not written to give a company a strategic market advantage, but you have used the courts to do just that.

So you trade (create) approximately $200,000 in stock and securities to eliminate $1 million in bank debt (x275). Let's not mention the shameful amount paid to erase the unsecured debt (of which we are told very little), and the “here's our offer, take it or leave it, throw the lease agreement in the trash can” deal with the lessors. This should earn you guys fat salaries.

We know who the winners are in this scheme, but RER failed to list the losers. Perhaps the list is too long. If you ever take the time to compile one, just remember to add the legitimate, debt-honoring rental companies that are forced to compete in this new environment whose arrival NationsRent is so proudly proclaiming.

The “conventional wisdom” that you mention in the article holds that companies such as NationsRent are supposed to go on the auction block. The fact that this is not going to be the case will have consequences, you can be sure.
Michael Stewart
President
Heart of Texas Equipment Rentals
Johnson City, TX 78636
jstewart@moment.net