Ahern has since arranged up to $50 million in debtor-in-possession financing for daily operations and for meeting its $1.7-million weekly payroll. Ahern's financial advisers, Oppenheimer & Co. Inc. and The Seaport Group, are both based in New York City.

"We anticipate there being no interruption to our operations," says Don Ahern, 57, in a recent statement. "We will have sufficient liquidity to meet our commitments." Ahern last year earned $988,500 as company president. "We have been experiencing a significant improvement in our business, with a substantial increase in our utilization levels and improved margins," he says.

Indeed, the company's fortunes have recently improved, with $241.1 million in revenue for the nine months ending Sept. 30, 2011, up 13.1% from the same period a year ago, court filings say. Meanwhile, Ahern has expanded into infrastructure-related sectors and alternative energy, among other markets, while still maintaining a concentration of aerial equipment that has "both longer useful lives and superior value retention," court documents say.

The company could also see a lift from Xtreme—a rugged line of telehandlers, rough terrain forklifts and flip-tail delivery trucks Ahern launched in 2003. Although a separate company, Xtreme has found a ready outlet through Ahern's rental stores and developed a strong, loyal following of users.

Although Ahern Rentals' shaky financials have led to a greater separation between the companies, the recession has left fewer telehandler manufacturers still standing—a good position for Xtreme. "The market contraction has reduced the competition," Ramsey says. "The Xtreme product has been phenomenally well accepted, and they have huge opportunity." Ahern has been loath to sell Xtreme machines to rental competitors, limiting future growth.

Possible Merger?

Ahern's future could involve a merger, as more independent companies find it tougher to operate in today's bottom-line workplace. Large national companies like Greenwich, Conn.-based United Rentals Inc. have more buying power with equipment manufacturers and suppliers, as well as easier access to capital.

United, for instance, recently obtained $4 billion in institutional financing for its acquisition of Scottsdale, Ariz.-based RSC Holdings Inc., a $1.9-billion deal worth up to $4.2 billion including debt. The merger combines the nation's top two equipment rental companies, creating an industry juggernaut that will make it harder for mom-and-pop rental outfits to compete.

Despite all these challenges, industry pundits say that Ahern is well-positioned to emerge from bankruptcy unscathed. Independent rental companies can often provide better and more personal service while filling unique market and geographical niches.

"National and regional equipment rental companies that filed Chapter 11 bankruptcy have all come out of it," says one rental business expert who requested anonymity because Ahern is a client. "My suspicion is that Ahern Rentals will be able to restructure their debt. Don Ahern is an extremely loyal, driven businessman. He is not the kind of guy who sells his business out of distress. It's his family name."