Hertz Global Holdings Inc. will spend $168 million to settle hundreds of claims that it falsely reported rental customers to the police for car theft when a vehicle was not returned on time.

The company had been fighting to bottle up the lawsuits in bankruptcy court, but in the last few months, lawyers for many claimants had won the right to take their cases before jurors. The deal will end 364 claims, or about 95% of the allegations that Hertz faces, the company said in a statement.

Hertz is likely to recover a “meaningful portion” of the settlement from its insurers, according to the statement.

Lawyers for the customers who are suing Hertz did not immediately respond to a request for comment. The company’s shares dropped 1.7% to $16.59 on Monday morning in New York.

Hundreds of customers said in court papers that Hertz filed police reports against them and had them falsely arrested, often at gunpoint. A small number of those cases allege errors by Hertz employees caused police to pull over innocent customers on suspicion of driving stolen cars.

The company filed bankruptcy in 2020 as the Covid-19 pandemic ravaged the economy and brought car rentals to a halt. Hertz exited bankruptcy oversight last year, but left a shell company behind to pay off its older, disputed debts, including the false arrest claims.

Bankruptcy courts don’t have juries and disputes are typically settled by judges focused on rehabilitating financially distressed companies. In state courts, juries...

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