01.11.2012

Another month for Ahern

Don Ahern of Ahern Rentals has until November 30th to present and obtain support for his plan of reorganisation, before it is thrown open to others to present a plan or for bankruptcy proceedings to commence.

U.S. Bankruptcy Court Judge Bruce Beesley has also ordered Ahern to present the first draft of a reorganization plan to lenders within in the next three weeks. Having done this Ahern might be granted a little extra time to round up support for his plan.

Ahern will need to convince the key creditors and the Judge that the business has the financial resources to meet the commitments laid out in the plan and that it will not revert to defaulting on them.

As the market has improved Ahern Rentals has returned to profit and we understand that the longer it can delay the better position it will be in.

Vertikal Comment

The way this case has dragged on – the standard period of exclusivity expired in March – has exasperated the company’s large secured creditors, while the smaller trade creditors can see that if the business is given more time and the big note holders take a ‘haircut’ on their debt, they might actually receive at least a partial payment on their debt, compared to nothing if the company is forced into liquidation.

One major problem for Ahern is likely to be the raising of new capital to fund the business going forward. But this case is not over yet, Ahern will have some substantial support locally which will certainly help, but over half of his debt pile is owned by institutional type lenders the largest being Platinum Equity, although we understand that it was looking to sell its notes at a substantial discount last month in order to bail out of the process – although this has not been confirmed.