11.05.2012

Ahern gets his extension

Don Ahern has been given an extension to its period of exclusivity to file a plan to exit Chapter 11.

U.S. bankruptcy judge Bruce Beesley, who is presiding over the case in Reno, granted the company’s request earlier this month for a 120 day extension to the original 120-day period in which Ahern has the exclusively right to propose a reorganization plan to exit the Chapter 11 bankruptcy process.

Las Vegas based Ahern Rentals filed for Chapter 11 reorganization on December 22nd in order to restructure $620 million in debt, having failed to gain a voluntary agreement from all of its lenders. The new deadline expires on August 20th.

Tom Gores, whose company Platinum Equity already owns Maxim Crane Works and Barnhart Crane and Rigging and through Sphere Capital is Ahern’s largest bond holder and is rumoured to be interested in acquiring the business and using his holding to make this happen.

While Sphere avoided making a direct objection to the extension request it did put forward a written statement to the court which said: ''there is nothing unique about this case that requires an extended stay in Chapter 11. 'Sphere is ready, willing and able to partner with the debtor to reach agreement on a path forward that gives maximum value to all stakeholders.''

Since the December filing business has picked up significantly for rental companies, including Ahern which reported that Earnings before Interest Tax and Depreciation were almost double what it budgeted when entering the Chapter 11 process.

The company’s rationale for the extension was that most of its resources in the first 120 days were devoted to ensuring a smooth transition into Chapter 11, access to financing, maintaining operations and evaluating its assets and liabilities. As a result it had not yet had the opportunity to complete the evaluations and negotiations which are necessary to formulating its plan.

Once Ahern does file his plan Platinum or another company can file an alternative reorganisation plan to compete with it. However if the incumbents plan is reasonable and fair it has a significant advantage.

Click here to see Ahern ownership under pressure

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Ahern Files for Chapter 11