For the third time since Six Flags Inc. officially declared bankruptcy, the board’s plan has been altered and resubmitted, aiming to further compensate senior shareholders. Six Flags is the world’s largest regional theme park operator, and when they filed bankruptcy earlier in the year, the company planned to transfer close to all of its stock to their senior lenders, which included JPMorgan Chase & Co., in effort to further reduce its debt.
Senior noteholders own more than $500 million of the approximately $870 million in notes issued by Six Flags Inc. The new proposal asks that lenders and a senior class of noteholders be paid in full, with cash or the reinstatement of debt if need be. In addition, the plan asks that the senoir noteholders receive up to 81 percent of the reorganized company’s stock. Less than 5 percent was offered in the company’s initial plan.
Six Flags Bankruptcy Proposal
Avenue Capital Management is the hedge fund that owned the senior class of notes. The latest proposal, the one suggesting senior lenders be paid in full, is being referred to as the Avenue Capital proposal.
There was no mention of recovery for the company’s junior class of noteholders, led by hedge fund Stark Investments.
PIERS, Six Flags’ preferred shareholders, proposed a plan that pays all creditors in full, which is backed by Resilient Capital Management LLC, the company that proposed raising capital by issuing convertible securities.
Related Information
Stark Investments Company Information
Six Flags Bankruptcy May Take 4-6 Months, CFO Says
Six Flags Files for Chapter 11 in Accord With Lenders
Six Flags Theme Parks
Six Flags Ticket Sales
I’ve been following this case closely.. I couldn’t believe the proposal first put forth by Six Flags. I believe that the senior investors will get their way and retain ownership of the restructured company.
I can’t believ that 6 Flags filed bankruptcy.. Clearly they are trying to restructure right?? They’re not trying to sell are they?