28.02.2013

Ahern files new plan

Don Ahern has filed a new plan of reorganisation for Ahern Rentals, currently in Chapter 11, following the submission of a competitive plan by a number of note holders. See Alternative plan or Ahern

Ahern’s claims that the new plan, filed on Monday, provides 100 percent recovery to creditor's claims according to the definitions specified by the court. If so this would allow the Aherns to retain full ownership in the company after it emerges from the bankruptcy process.

The plan also criticises the note holder’s plan and highlights its risks, such as a complete change of management.

A discovery hearing is scheduled for March 8th when the judge has the opportunity to approve or disapprove either plan before they are submitted to all creditors. He is likely to look closely at the Ahern claim to be offering a full payout. If one or both plans are given the go ahead, a confirmation hearing is then likely to take place in June.

With the company experiencing a strong upward trend in business, including a record month in November, Don Ahern has a good chance of achieving his aims, as long as he can come up with sufficient funds to pay out all creditors on terms approved by the judge.

Vertikal Comment

This is a hard one to call from a distance, playing for time has clearly paid off for the Aherns and they stand a good chance now of retaining ownership. The biggest challenge though might be raising the necessary finance in a funding market where some strongly negative feelings are clearly present, following the note holders fight with the company.

The March 8th hearing will provide some clear insight to how the terrain looks. A glance at the filing suggests that the first hurdle will be to convince the judge that the Ahern plan meets the full payout requirements in the eyes of the law.

There are over 20 reports on www.vertikal.net covering the Ahern Chapter 11 process to see them all enter Ahern in the Vertikal news search box.