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UPDATE 1-Budget car rental files for bankruptcy

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By Jeffrey Goldfarb

NEW YORK, July 29 (Reuters) - Car-rental company Budget Group Inc. filed for bankruptcy protection on Monday, as expected, and said it secured $750 million of loans to pay for new cars and $100 million of additional funding to keep the company running as it reorganizes.

Budget, facing billions of dollars of debt amid a slump in travel following the Sept. 11 attacks on the United States, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware.

The company listed $4.05 billion of assets and $4.33 billion of liabilities.

"Despite the success of our efforts to increase productivity and rationalize costs, the impact of September 11 and the continued recession in the travel sector has left Budget Group with a level of non-vehicle debt greater than our operations can reasonably support," Budget's Chief Executive Sandy Miller said in a statement.

Its largest creditor is Wells Fargo Bank, as trustee for about $430 million of debt, according to court papers. Most of its largest creditors are banks.

Budget, with 6,500 car and truck rental locations worldwide, had been in talks to be bought by travel and real estate giant Cendant Corp. for $100 million.

With the $100 million of debtor-in-possession financing, Budget said day-to-day operations should remain intact as it restructures the company.

Budget needed the $750 million of vehicle financing to increase and upgrade its fleet from Ford Motor Co. to compete in the peak summer travel months.