Ahern Rentals, Las Vegas, is trying to continue to fight for the right to solve its own financial issues, rather than being taken over by a lender.
The company had received a stay from the U.S. District Court in Reno, Nev., to the U.S. Bankruptcy Court’s Dec. 7, 2012, order that would allow lenders to submit their proposals to reorganize Ahern’s debt.
However, U.S. District Judge Larry Hicks on Jan. 14, 2013, after hearing arguments from lenders, reversed his position and vacated the
stay order, allowing lenders to make proposals.
Howard Brown, chief financial officer for Ahern, said, “Needless to say, we are very disappointed in the ruling by Judge Hicks and immediately filed an appeal with the Ninth Circuit Court of Appeals.”
Ahern, in its Nov. 30 plan, had offered two sets of lenders, who hold $379.2 million in debt, a choice between accepting a discounted lump sum payment or receiving repayments over a longer period than specified in the initial loan agreements.
Judge Bruce Beesley rejected the plan and said it was not acceptable because creditors would not be repaid in full, yet Ahern would not suffer any loss. As a result, the judge ended Ahern’s exclusivity period on Dec. 7, 2012.
Ahern Rentals, which is one of the largest family-owned rental businesses in the U.S., announced on Dec. 22, 2011, that it had filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Nevada. A company is normally given 120 days to present to the court and lenders a plan to reorganize its debt. In the Ahern case, four extensions of the deadline were given by Judge Beesley before he ordered the period of exclusivity to end on Dec. 7, 2012.