Six Flags Files Chapter 11 Bankruptcy
Six Flags Inc., one of the largest regional amusement-park companies, filed for bankruptcy protection Saturday.
The theme-park company, shouldering more than $2 billion in debt, had been negotiating with lenders, selling parks and laying off staff in a race to restructure outside of bankruptcy court. But it couldn’t outrun the deteriorating economy and a looming $288 million payment due preferred shareholders this August, along with $31 million in unpaid dividends.
Six Flags hopes to exit bankruptcy quickly through a prearranged reorganization plan. It struck a deal with senior secured lenders that would allow it convert $1.8 billion in debt to equity.
The plan was backed by J.P. Morgan Chase & Co., the agent for the facility, and a steering committee of lenders, according to court documents. The support represents half the facility’s obligations, the company said. The plan would also wipe out more than $300 million in preferred stock obligations.
Six Flags listed assets of $3 billion and liabilities of $3.4 billion, including $2.4 billion in debt at the end of March. Among its largest unsecured creditors were HSBC Bank USA with $400 million in bond debt and Bank of New York Mellon, holding more than $500 million in the company’s debt.
The filing marked another highly-leveraged company falling victim to the deep recession. Six Flags’ 20 parks dot North America, with operations in Chicago, San Antonio and Mexico City. Revenue in the first quarter fell 24% and the company delayed certain debt payments. Several of the park company’s subsidiaries also filed for protection from creditors.
The Chapter 11 filing is a setback for investor Daniel Snyder, the Washington Redskins football team owner who took control of the theme-park company in a contentious proxy fight in 2005 and installed his own management team. The bankruptcy would likely wipe out Mr. Snyder’s 6% stake.
In the midst of his battle to wrest control of the company, Mr. Snyder wrote a letter to Six Flags stockholders saying they “would have been better off hiding their money under a mattress” than investing in the company under its prior management.[...] Source: WSJ
Opps.. I guess the shareholders should have left the money in the mattress… Now they have nothing.
That’s too bad for the employees.
I thought Six Flags had filed bankruptcy years ago. That stock has been a dog for at least half a decade.