16.01.2013

Ahern appeal dismissed

The district court of Nevada has granted a motion by Ahern Rentals’ second lien note holders to dismiss the company’s appeal against an earlier ruling ending its period of exclusivity.

The ruling opens the door for other plans of reorganisation which can be put to creditors as alternatives to the one already presented by the company and its current owners.

Whether anyone will now go all the way to present a more attractive alternative, remains to be seen. However the note holders themselves are angry with how long the process has taken and by the fact that the plan the company finally proposed left them and other creditors short of a full pay out, while allowing current owner Don Ahern to maintain his full 97 percent holding in the business.

The note holders behind this week’s motion included Och Ziff Capital Management which recently sold its stake in UK rental company HSS, while Platinum Equity, owner of Maxim Crane, is also understood to hold a large portion of the Ahern debt.

Ahern immediately filed a new appeal against this latest decision.

Vertikal Comment

Ahern Rentals has made strong trading progress since it filed for Chapter 11 back in December 2011, benefiting from an improving market and from the investments it made prior to that. The question now is can Ahern raise the funds that might be required to support a plan that will win creditor approval?

This process still has a way to run and the outcome, while it has moved in favour of those note holders who would like to see an alternative plan, it could still go either way.