The U.S. Bankruptcy Court for the District of Nevada in late April was expected to rule on a March 23 request by Ahern Rentals, Las Vegas, for more time to present the court with its plan for reorganization in its Chapter 11 case, which was filed Dec. 22, 2011.
The court allows 120 days for the presentation of a reorganization plan and an additional 60 days for its debtors to vote on the approval of that plan. Ahern has requested an additional 120 days for each deadline, which would give the company until Aug. 20 to present its plan and until Oct. 19 to secure acceptance of the plan. The original deadlines would have been in April and June.
At an April 3 hearing, U.S. Bankruptcy Judge Bruce Beesley gave debtors until noon on April 4 to respond to Ahern’s motion to extend the deadlines.
A group of noteholders who hold 33.67 percent of Ahern’s second lien notes did respond on April 4. The group of noteholders, in their court filing, argued that there had been a year-long restructuring initiative leading up to Ahern’s Chapter 11 filing and that the rental company’s “assertion that this is a ‘complex’ restructuring is unfounded.” However, the group said that it was not arguing against Ahern’s request for extensions, only that it was suggesting that the court allow a shorter extension than Ahern was requesting.
A hearing was held on April 10, but no decision was made, pending an April 30 hearing.
Also in early April, speculation emerged that Tom Gores’ Platinum Equity, which already owns Maxim Crane Works, might use its stake in Ahern’s debt to take over. Bloomberg’s Businessweek.com reported that two unidentified investors in Ahern’s debt have said that Gores’ investment group will make a play for the company, but no such move had been
made at presstime.
In its filing, Ahern Rentals said that it had used significant time and effort in working with its debtholders to remain operational since filing for bankruptcy and that the extension was necessary in order to complete:
- A review and analysis of its cash flow and operational projections for 2012 through 2013, and developing projections for 2014 and 2015.
- A valuation analysis of the its business, essential for the classification and treatment of creditors under a plan.
- An analysis of its executory contracts.
- The evaluation of the leases as referenced above to determine the disposition of each of the leases, with a particular focus on the related-party leases.
- An analysis of claims against the debtor, including personal injury claims,essential to the determination of the treatment of various classes of creditors under the plan.
The company filed for Chapter 11 because it was unable to extend the maturity of its revolving credit facility, which had a maturity date of Aug. 21, 2011. Since the maturity, the bank has continued to fund the company and negotiate the extension of the revolving credit facility without the necessity of a bankruptcy filing. While Ahern said financial performance continues to improve, the company said it was forced to seek bankruptcy protection to address the maturity of its revolving credit facility, despite the fact that about 90 percent of the company’s lenders would have consented to an extension.
The company has said it intends to continue its business operations throughout the administration of Chapter 11 and to honor all of its existing customer, vendor and employee commitments without interruption.