After a group of creditors filed a reorganization plan aiming to take control of, Ahern filed a revised reorganization plan with the U.S. Bankruptcy Court in Reno, Nev., this week. Ahern’s new plan provides for a 100-percent recovery to all claims. Ahern’s new reorganized plan also maintains that the Noteholder Plan would result in a complete change in management and, therefore, would be subject to greater execution risk. The noteholders’ plan also improperly classifies claims, rests on artificially low valuation and has other technical flaws, Ahern’s revised plan contends.
A group of Ahern Rentals noteholders recently filed a competing reorganization plan that would give them control of the rental company to satisfy $267 million of debt the group of creditors is owed, according to documents filed. Under the plan, current owners Don Ahern, owner of 97 percent of Ahern Rentals, and his brother John Paul Ahern, owner of 3 percent of the company, would receive only warrants to purchase stock in the reorganized company.
A discovery hearing is scheduled for March 8 and a confirmation hearing is scheduled for early June. At the discovery hearing, the bankruptcy judge has the opportunity to “approve” or “disapprove” of the plans, which is not an opinion on the merits or a decision, but merely allows them to be considered by the creditors. A confirmation hearing is scheduled to take place in June.
Ahern Rentals points out in its plan that the company has significantly turned the corner in terms of performance. After adjusted EBITDA bottomed out at $46.4 million in June 2010, Ahern Rentals’ pro-forma adjusted EBITDA has jumped 151.5 percent to $116.7 million for the full year 2012. Ahern Rentals achieved its highest rental revenue month in its history in October 2012, and the highest total revenue it ever recorded in November. Total revenue for 2012 was $380.1 million, a 14-percent increase compared to $333.5 million in 2011, while rental revenue jumped 11.1 percent from $301.4 million in 2011 to $335 million in 2012.
Going back a year, 2011 also brought a significant year-over-year revenue increase, jumping 22.3 percent in rental revenue (from $246.5 million in 2010 to $301.4 million in 2011), and 14.7 percent in total revenue, from $292.4 million in 2010 to $333.5 million in 2011.
Las Vegas-based Ahern Rentals filed for Chapter 11 bankruptcy protection in December 2011. The company’s fortunes were impacted by the recession and a large reduction in new construction projects and the cancellation of projects already started. The company is No. 7 on the RER 100.