The judge in the Ahern Rentals bankruptcy case ruled that other parties may submit alternate reorganization plans. At a hearing last Friday in Reno, Nev., Judge Bruce Beesley terminated Ahern Rentals exclusivity period during which time only the company could submit a reorganization plan. Owner Don Ahern was given the usual 90-day exclusivity rights to submit a reorganization plan when the company entered Chapter 11 bankruptcy protection Dec. 23 last year, after which Ahern Rentals was granted four extensions.
Beesley stated he saw no progress in resolving differences between Ahern Rentals and its creditors, the Las Vegas Review Journal reported. Since Ahern Rentals’ draft plan proposed that creditors accept a lesser payoff amount or be repaid over a lengthy period of time, creditors are asking for Ahern to give up a portion of his 97-percent ownership as part of the payoff. Although Ahern attorneys said they would appeal Beesley’s ruling, the judge refused to delay the rest of the case to wait for the outcome of a potential appeal.
The plan lists $379.2 million in debts held by major lenders plus much smaller amounts held by others. Beesley said he does not think Ahern's plan offers full repayment. Ahern attorneys called that judgment premature.
Ahern has contended that alternative ownership would ultimately result in layoffs of Ahern staff, a possible eventual sale of the company and then additional job losses. However, the creditors have argued that under bankruptcy law, Ahern cannot maintain full ownership without making full repayment of the debts.
Ahern Rentals was originally founded by Ahern’s father John Ahern in 1953. Under Don Ahern’s ownership, the company grew to become the largest family-owned rental company in North America. The company, which now has more than 70 branches, grew dramatically in the 1990s and 2000s, but slowed down during the recent recession. Its fortunes have improved significantly the past two years, but the company has yet to convince the judge it can fully repay its creditors. Ahern Rentals is No. 7 on the RER 100.
