The last few years have been absolutely terrible for Don Ahern.
The president of Ahern Rentals in Las Vegas had to lay off 400 employees, sell off 3,000 pieces of equipment and fight off creditors in bankruptcy court.
It took a tremendous effort to keep the equipment rental business founded by his father in 1953 alive, he said.
"Three-fourths of our equipment had to leave the market and went all the way across the United States to the East Coast," Ahern said in his office off Martin Luther King Boulevard, a few blocks from Ahern's line of boom lifts, scissor lifts and forklifts on Bonanza Road.
Riding the construction wave in Las Vegas, Ahern Rentals grew to the seventh-largest rental company in the United States with more than 41,000 pieces of equipment. MGM's CityCenter project alone had more than 4,000 pieces of Ahern's equipment on site.
Ahern peaked in 2008 with $381.4 million in revenues and earnings of $150.1 million before taxes, depreciation, amortization and interest.
Then came the crash. Construction projects were halted, leaving Ahern with thousands of pieces of equipment with loans against them but earning little. Revenues dropped to $292.7 million and earnings to $53 million.
"We were pulling equipment out of California. Every store was shrinking, but nothing like Las Vegas," he said. "We needed to survive and the problem was the equipment wasn't worth what we paid for it and everybody else was selling, so we decided to open 35 stores."
The company opened 35 new locations outside of Nevada since 2010, giving it more than 80 locations nationwide.
At its peak, the company employed 1,900 people, including 600 in Nevada. There were layoffs, but also new hires in other locations such as Texas and along the Eastern seaboard, Ahern said.
The outlook for the construction industry is improving. Nationwide, construction spending rose 0.4 percent in June and is up 7 percent from a year ago, according to the Associated General Contractors of America. It's climbed four straight months to a 2½-year high.
Las Vegas has seen a minor recovery in the last 12 months, Ahern said. For the year ended Nov. 30, revenues are up to $329.8 million and earnings up to $76.5 million.
What kept Ahern afloat are the $50,000 to $140,000 Xtreme forklifts and wheel-loaders manufactured at its Las Vegas plant, along with steel-framed cubes used as living quarters and offices for mining operations worldwide.
"It's moving up and it looks like it will be busier next year," he said.
That's if there is a next year.
Carrying $630 million in debt, Ahern filed for Chapter 11 bankruptcy protection in December. At an Aug. 6 hearing in Reno, U.S. Bankruptcy Court Judge Bruce Beesley extended Ahern's exclusivity period until Oct. 9, during which time the company can propose a reorganization plan. Once the period expires, others can jump in with their own plans or even takeover proposals.
Ahern said he wants to pay the bondholders 100 percent and make them whole, but there are investors who bought the debt for 25 cents on the dollar when the company was down, and they have a different strategy.
The main creditor is Los Angeles billionaire Tom Gores, whose company, Platinum Equity, holds more than $119 million of Ahern's $237 million second-lien note, according to court documents.
"All they want to do is own us," Ahern said. "They'd make 75 cents on the dollar, but that's not enough for these guys. We've got 500 people. If somebody else owns this company, there'll be huge job losses. These guys are from New York and Beverly Hills (Calif.). They want to flip the company and sell it to a competitor. Almost half the staff would be gone. The support jobs would be at high risk.
"That's really what our dilemma is here. We've got these hedge funds with big chunks of capital. They go out and find companies that are struggling. The shame is we could have paid them anyway. The bank stopped us from going out and using our revenue stream to pay the bondholders, so when they didn't get paid, they sold the bonds for 25 cents on the dollar predominantly to one company. They have 51 percent of the bonds and they don't want it paid in full, they want the company," Ahern said.
Ahern's father, John, started the business from his gas station where the Stratosphere now stands. He rented swamp coolers mounted in car windows before the days of air conditioning, primarily used by tourists traveling to California. He expanded to lawn and garden equipment, then small tractors and trucks. He also built and rented the trailers to haul the equipment.
"He built a lot of equipment and that became inherent to me," Don Ahern said. "I had a welding helmet on at 5 years old and handed him welding sticks."
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.