Six Flags Bankruptcy

[nitrofan]

As many of you probably know, Six Flags filed for Bankruptcy earlier in June. While it was a sad day for many enthusiasts, they are not closing, and will continue operation for years to come!

Here is a link to a FAQ created by the company:
http://www.sixflags.com/national/footerNav/frequentlyaskedquestions.aspx

Any Discussion on Six Flags Bankruptcy goes here.

[Austin]

I got a feeling they will come back strong from banktruptcy.

[nitrofan]

I really hope they get out of this. Now that Shapiro has shone us what he can do with theming (Terminator), I really want to see what he can do without $2.4 Billion in debt. He cleaned out the parks and made them profitable, we could see some amazing new rides without the debt issue.

And the bad news is that if something goes wrong, SFKK will probably be one of the first parks to go.

Having no news about how this is going kind of makes me nervous, but I'm going to say no news is good news.

[Austin]

They wont eliminate KK. Its one of Six Flags most profitable parks.

They said they want to eliminate 2.1 Billion off the debt with banktruptcy so if im right that leave 300 million left. Shapiro also told staff they made 275 Million last year but had to pay 175 Million to debt interest and then another 100Million in ark improvements. well here ill post the letter.


June 13, 2009

To All Six Flags Employees:

As employees of Six Flags, your talents and dedication have been the most critical factor in the success of our business. Thanks to your efforts, Six Flags has achieved tremendous operational milestones and we now stand ready to take the next necessary step to improve our overall financial health and position the company for continued growth and opportunity.

The turnaround strategy we began implementing in the spring of 2006 has come to fruition. Together, we cleaned-up our parks, enhanced the overall guest experience, repositioned the Six Flags brand by diversifying our product offering, and the company became free cash flow positive for the first time in its history. We delivered on our agenda and as a result, rebuilt the faith, trust and overall relationship with the consumer.

Pride in our company across the workforce has also been restored.

Unfortunately, however, as you know, we inherited an unsustainable $2.4 billion debt load from the previous management team. To put it into context, even if you have a record year and make approximately $275 million as we did last year, when you have to pay out approximately $175 million in interest expense on your debt and $100MM in park improvements to maintain and keep up with the business, that's a balancing act you just can't risk year in and year out. Furthermore, we have over $400 million of debt coming due within the next 12 months that cannot be refinanced in these financial markets.

That's our situation in a nutshell.

Today, we are moving to rectify our balance sheet once and for all. This morning, Six Flags announced it is seeking expedited approval from the Bankruptcy Court for the District of Delaware of its pre-negotiated plan of reorganization under Chapter 11 of the United States Bankruptcy Code. The plan has unanimous support of the lenders’ Steering Committee and the Administrative Agent for the Company’s $1.1 billion senior secured credit facility. This support is evidenced by executed lock-up agreements.

We expect to proceed quickly and we intend to emerge from these proceedings in the coming months with a significantly improved balance sheet and greater operational and financial flexibility.

Our brand and our operations are on solid ground. This process is strictly a financial restructuring of our debt and that’s how you should view it and speak about it.

No one should be confused about what a bankruptcy process means for Six Flags. Following a record year of performance in 2008, which completed the three-year turnaround of our system-wide park operation, this action to clean up the balance sheet paves the way for a full revival of the company. Believe me when I say we will emerge from this process stronger and more competitive than ever.

This was a difficult decision for management and the Board of Directors, but it is the right thing to do for Six Flags. It is critical that you - and our guests, suppliers, families, and friends - know that every park is open and operating today and will continue with normal operations this summer and for years to come. This restructuring process is strictly a “back of the house” effort to address and ensure the longstanding financial stability of Six Flags.

To address what must be foremost on your mind: ALL OF OUR EMPLOYEES WILL CONTINUE TO BE PAID IN FULL AND ON TIME. YOUR BENEFITS WILL CONTINUE. NO REDUCTION IN WORK FORCE WILL ARISE OUT OF THIS FILING.

Our suppliers and other partners will continue to be paid for their goods and services so our product and entertainment offerings will not suffer.

As the face of Six Flags, none of us can allow the distraction of this parent company issue to tarnish what we all have worked so hard to accomplish these past three years. That said, it is up to you to ensure that our guests continue to enjoy the high quality entertainment experience they have come to expect from us. We know from years of experience and research that the single most important factor in providing our guests a memorable experience is their positive interaction with our employees. Particularly in this difficult economic environment, all of us at Six Flags must re-dedicate ourselves to providing the friendly, clean, fast and safe service our customers now expect, and deserve. More than ever, consumers are gravitating toward experiences they know and trust. Six Flags has been a favorite family destination for almost a half century. Our reorganization will ensure that our parks will continue to entertain millions of guests for another 50 years.

With your continued efforts, these proceedings will allow us to emerge as a healthier, more dynamic company with a whole new world of opportunities. When this financial procedure is completed, Six Flags will have shed the greater part of a burden that threatened to undermine all our success. So, keep working hard and stay focused. At the same time, spread the word about what we've accomplished, what we're now doing and why. As an ambassador of the company, educate anyone and everyone around you. Feel free to share this note with your own social network – family, friends, neighbors, blogs, etc. Get the word out. People want to be informed.

As such, I will continue to relay pertinent information as it becomes available. In the meantime, I'd like to thank you for your continued support as we re-build the road to future success.


Sincerely,

Mark Shapiro


President and Chief Executive Officer
Six Flags, Inc.

http://www.sixflags.com/national/footerNav/News_OpenLetterFromOurCEO.aspx

[nitrofan]

They wont eliminate KK. Its one of Six Flags most profitable parks.


I'm sorry, but I'm going to have to disagree.

SFKK is in one of the smallest markets of any of the chain's parks, and its crowd levels reflect it. The only parks I see as safe for sure are SFGAdv and SFGAm.

[Asa]

The 3 originals will stay. Texas Gerorgia, and Mid America.

I see KK getting sold as a positive thing. !

[nitrofan]

The 3 originals will stay. Texas Gerorgia, and Mid America.

I see KK getting sold as a positive thing. !

First of all, SFI doesn't even own SFOT or SFOT. I don't think SFStL is high on the priority list, and I think SFKK would be one of the first to go.

[Austin]

SFKK's attendence was 1.3 million back in 2003 they havent released numbers recently tho. Its in a very good market. You get KI near it, Holiday world just north, and beechbend south. Alot of people make stops here to visit SFKK ont he way to each of those parks.

[nitrofan]

SFKK's attendence was 1.3 million back in 2003 they havent released numbers recently tho. Its in a very good market. You get KI near it, Holiday world just north, and beechbend south. Alot of people make stops here to visit SFKK ont he way to each of those parks.

While the $1.3 Million is a pretty healthy rate, but that was a year of a new coaster, and Six Flags' attendance has decreased chainwide. I know SFGAm's attendance in 2008 was 2.7 Million and SFGAdv had about 2.8. I would say the SFKK one is probably around 1-1.3 Million.

While 1 Million is good for a park the size of SFKK, it's still signifigantly lower than the best of Six Flags, which proves my point. First, SFOG and SFOT would not be the first to stay. Second, while I'm sure SFKK is profitable, it just isn't high on the priority list.

[Austin]

This park is making money out its butt. Its illogical to get rid of it because of attendence. You aint seen the price people pay to just eat there its like 10% more exepnsive then other parks. I guess becuase parking is only 5 dollars. The park owns the land around chang and T2 so its got plenty of land to expand onto in the next few years if it needs to. Last year the park got over 1.2 million people because they said it had been their best year at the park in about 5 years so that was encouraging and the concert series this summer the lines for almost everything was between a hour and 90 minutes. the parks been packed almost all year.

SFKK is one of the parks that helps finance all these new rides like Terminator and evel keneval just because they dont have to add anything every year and it still makes alot of money

[Austin]

btw SFOT? thats the six flags chain first park. that will never be sold

[nitrofan]

^Sorry if I wasn't being clear. I didn't mean get rid of SFKK due to low attendance, I meant that it would be the first to go if SFI was forced to liquidate. While I hope it doesn't happen, SFKK would probably be one of the first to go, like when several parkes were sold a few years ago.

[Austin]

They wont be forced to liquidate. btw i edited that post and added a bit more before u posted.

The park is small but it makes alot of money the chain needs to build things liek terminator and evel keneval.

[nitrofan]

They wont be forced to liquidate. btw i edited that post and added a bit more before u posted.

The park is small but it makes alot of money the chain needs to build things liek terminator and evel keneval.

My concern is that they aren't doing things like that.

Also, I don't thinl SFOT being the chain's first park has anything to do with it getting sold. While it's in the middle/upper pack, if Six Flags files chapter 7 and liquidates, they will sell every asset they have until their debt is paid off. If they pay off every single penny of their debt, that is the only circumstance where they can continue to operate with remaining assets.

[Austin]

they will come out of chapter 13 just fine. I mean look at GM

[nitrofan]

^They also have unlimited funding from the government. Six Flags is in a completely different boat than the car companies. Look at Circuit City, look at Linens n' Things. Their CEOs were confident that they would emerge when they filed chapter 11, but didn't. I don't mean to be Mr. Negative here, but there are lots of things that can go wrong. We can't assume the company will be fine just because Shapiro says the parks will remain open.

[Austin]

no GM doesnt have unlimited. they only got between 10-20 billion which they are repaying the govt.

[nitrofan]

no GM doesnt have unlimited. they only got between 10-20 billion which they are repaying the govt.

But GM has access to unlimited money to stay in business if they need it.

[razor12]

If SF was forced to liquidate then I would say Great Escape and Six Flags America would be on the chopping block before SFKK. SFA and GE are the "forgotton" parks in the chain. SFGAm, SFGAdv, SFFT, and SFoG are probably the four safest parks. SFMM is in high competition on the west coast and they have to continuously throw money at it causing it to become a hassel.


SFFT is safe because Shapiro likes it over most, which is why its the second most well kept park under SFGAm.

Anyway, Six Flags will not get rid of any remaining parks. Thats why they sold the US ones to PARC and the overseas parks. The company has done an entire 180 and creeping out of debt, which is why its now my favorite chain.

[Theripper45]

When are they going to open mile high falls and twisted twins though?
I WANT TO RIDE THOSE SO BAD!
Twisted Twins is a good coaster i have herd from lots of people!

MOD EDIT: What does this have to do with Six Flags going Bankrupt? Please stay on topic!

[Austin]

They arent reopening. Ever. Twisted Twins is already in the process of being sent out for scrap. Yea it was good int eh first like 4 years of operation, the rest were horrible, why do you think its already shut down?

[nitrofan]

This last page has been completely off topic.

We don't need to talk about Twisted Twins in every single thread on the site.

[Jp]

I came across this on Theme Park Review!!

http://www.themeparkreview.com/forum/viewtopic.php?f=2&t=51113&start=140
Well according to this, the already started the fight for the company. From the looks of it, the fight my prevent the company from emerging from bankruptcy.

http://www.google.com/hostednews/ap/article/ALeqM5i6VgwVIA3nGQWssTrs5b3dsgvyjwD9EAOAFO2

http://dealbook.blogs.nytimes.com/2010/03/09/six-flags-c-f-o-takes-stand-in-ch-11-battle/

* According to this article, there were numerous investors that were interested in the company. One of them struck my eye like a lighting bolt. (Apollo Management) was one of the companies that were interested in Six Flags. They also own the Cedar Fair properties.

Note: Apollo Management does not own Cedar Fair right now!!

[Austin]

This just in:

WILMINGTON, Del., March 19 (Reuters) - A group of bondholders led by Stark Investments will take control of Six Flags Inc (SIXFQ.OB) under a proposal announced on Friday that would lift the theme park operator out of bankruptcy.

Under the proposal, which requires court approval, the Stark group will invest $725 million in new equity in Six Flags, according to the company's attorney, Paul Harner of Paul, Hastings, Janofsky & Walker.

Under the plan, bondholders will also borrow $1.1 billion. The money will go to pay off creditors and provide working capital after the company emerges from bankruptcy.

Under the proposal, management will have warrants and options worth up to 15 percent of the company's equity. The rest will be owned by the group led by Stark, a large hedge fund based in Milwaukee.

The proposed settlement would also mean a change in strategy by the Stark bondholders, known as the SFI Noteholders. Before the trial, they indicated they were planning on replacing management if their plan of reorganization was adopted.

Now, current management will remain in place under the plan, Harner said. That means that Daniel Snyder, the owner of the Washington Redskins football team who took over Six Flags after a proxy fight in 2005, will remain as chairman. Mark Shapiro, whom Snyder brought in from ESPN to run Six Flags, will stay as chief executive.

A spokeswoman for Six Flags said the plan is now fully consensual and that some details still had to be worked out, such as completing the debt finance.

"We are absolutely comfortable with the level of debt going forward which is why we reached a deal," said Sandra Daniels, the Six Flags spokeswoman in an email. "The SFI note holders have stepped up and written checks for $725 million in new equity, paying off all the creditors senior to them -- that action more than anything signals their confidence in the company and the management team."

The proposed deal came on the ninth day of a trial in which the company was seeking approval of its plan of reorganization.

The company had adopted a plan drafted by a group of senior bondholders known as the SFO Noteholders, a group led by Avenue Capital Group. The company's plan proposed giving the Avenue Capital bondholders control in exchange for their roughly $420 million in debt. Under Friday's settlement, they would be paid in full.

While negotiations have continued during the trial, a source involved in the talks said the Stark group deposited $655 million in escrow last night. "That moved things along," the source said.

A major issue leading up to the trial had been the ability of the Stark group to finance its plan of reorganization. On the eve of the trial, it got a financing commitment from Goldman Sachs Lending Partners LLC (GS.N), UBS Loan Finance LLC and UBS Securities LLC (UBSN.VX).

Friday's settlement is expected to go before the court for approval on April 16, Daniels said, with the company expecting to emerge from bankruptcy shortly thereafter.

Bonds issued by Six Flags Inc, 9.625 percent notes due in June 2014, rose to 28.5 cents on the dollar on Friday, up 1.5 cents on the day, according to high-yield research firm KDP Investment Advisors.

The company still faces some hurdles.

Lance Laifer of Resilient Capital said he plans to continue a "vigorous fight" for a recovery. Resilient owns PIERS notes that will be wiped out under the settlement.

Laifer said the agreement "further highlights the fact that management and the board of directors are more interested in lining their own pockets with equity than with fulfilling even their most basic fiduciary obligations."

Laifer said Friday's proposal values the company at around $2.3 billion. The company's plan drafted by Avenue Capital had valued the company at around $1.6 billion.

"This agreement proves that the valuation works submitted by the so-called experts in the case dramatically undervalued the assets of Six Flags," Laifer said.

Six Flags has been largely unprofitable for a decade, making it an unlikely candidate for a pricey courtroom battle.

However, the debt that kept the company in the red also paid for ever larger and more thrilling rides, which creates a high barrier to potential competition.

For the Stark group, it remains to be seen if they acquired Six Flags for a sensible price and whether the debt has been reduced to a manageable level.

Joel Luton, the director of research for APS Financial in Austin, Texas, noted that theme parks have been on investors' radar in the last year and the trial revealed several parties were interested in the company.

He said Six Flags could be a way to play an economic recovery, although it might also do well in a downturn.

"There is a story there that this is an alternative to the Disney World vacations," he said.

Stark Investments did not return calls seeking comment.

A spokesman for Avenue Capital Group declined to comment.

The case is In re: Premier International Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-12019. (Additional reporting by Dena Aubin in New York; editing by Richard Chang and Andre Grenon)

http://www.reuters.com/article/idUSN1916902720100319

[nitrofan]

Sounds like things are going well for Six Flags!

[Austin]

This deal sounds ok but heres the wtf parts:

1. Dan Snyder. Football fans will understand this
2. Borrowing 1.1B to pay back their 1.1B in debt just to effectively replace it with 1.1B in new debt.

[palmer]

This deal sounds ok but heres the wtf parts:

1. Dan Snyder. Football fans will understand this


You got me at Dan. That little prick. I hate him. He is just a snotty nose idiot who owns a team that can't win, but seems to be able to have a stadium of 92,000 people capacity.

[Austin]

Haha is it strictly a football stadium or is it baseball? I'm guessing baseball with that capacity.

[nitrofan]

From Six Flags's Facebook:

It is with distinct pleasure that I inform you that effective today the plan of reorganization for Six Flags has officially been confirmed by the bankruptcy court.

Before explaining what this means to the Company, I want to emphasize in the strongest, most sincere terms, my admiration for the fortitude, focus and faith you have displayed despite the background noise of restructuring. I realize how frustrating, exhausting and perhaps dispiriting the last year has been. Still, you held firm and pushed through it all with remarkable dedication. Because of you and our unwavering investment in the product, our operation remains sound, our parks look better than ever, and our brand has never stood taller.

Over the next several days, the lawyers will finalize a multitude of details, and when the dust settles, Six Flags will have reduced its debt and mandatorily redeemable preferred stock from $2.7 billion last summer to approximately $1.0 billion (excluding seasonal drawings under our revolving credit facility at emergence). While we desired to achieve a lower debt level at emergence, keep in mind that our annual cash interest expense will have been significantly lowered to approximately $75 million. We also will have $725 million in new equity committed by our shareholders.

It would be hard to overstate what this new balance sheet means to the Company. Gone are the days when we were forced to pass on opportunities to improve our product and extend our brand because we simply couldn’t afford even a well-vetted and calculated risk. This, however, does not mean that we have an open checkbook. We always will be bound by our fiduciary responsibilities to all stakeholders, and accordingly must carefully weigh the wisdom of each new expense or capital investment. However, now that we are no longer wearing a fiscal straitjacket, we are free to evaluate new opportunities strictly on their merits.

I would be remiss if I didn’t remind everyone that having weathered this difficult and lengthy restructuring process, we need to continue to provide our guests with the best entertainment experience in our industry. Although we will not have to work under a crushing burden of debt, we still face formidable challenges from old and new competition made all the more difficult by the current economy.

Beginning today, we must re-dedicate ourselves to the proposition that our customers expect and deserve the friendliest, safest, cleanest and most prompt service. Our future success rests on our ability to provide an unforgettable experience. While we now have the financial strength to improve our product and to enhance, expand and extend the reach of our brand, it would be tragic if we forgot – or neglected – the road we traveled to reach this mark.

This day should indeed be celebrated, but is not the time to become complacent. We must stay the course, keeping our concentration, intensity and pride. Over the last few years, we have strengthened our company-wide bond and honed our skills. Now, with a new wind at our back, we are fully prepared to surge confidently into the future. Our potential has been multiplied and we must rise to the challenge. In my many discussions with our new Board of Directors, some of whom are continuing their service, I can assure you that the new Board is fully committed to our operational and strategic vision.

This chance will never come again. We’ve got our company back. Let’s reinvent and redefine the Six Flags Entertainment Corporation for every guest that walks through our gates.

I’m walking side by side with you.

Mark

[bobbinbop20]

Well, that was a pretty Inspirational speech, I've seen great things happen to the quality of Six Flags Parks over the past few years, and I'm just loving everything this company is doing more and more every day, even If ditching seemed wrong, It really was in there best interest..

[nitrofan]

^Me too. No more consistent 1 train operations, rude employees, run-down/unsafe parks, and hopefully no more parking lot coasters.

I'd like to see what they can do now that they will have a little more financial freedom. Maybe a B&M or Intamin themed on the level of Terminator?:)

[bobbinbop20]

I'm interested to see how there gonna theme Chang... should be pretty good because most of there recent theming jobs have been :)

[MadCard05]

I'm interested to see how there gonna theme Chang... should be pretty good because most of there recent theming jobs have been :)

They might not get to keep Chang. According to their lease agreement, since they didn't place the Water Park in Kentucky Kingdom Chang should technically revert back to the property of the KFEC. They filed a lawsuit against SF claiming theft by deception of the ride.

[nitrofan]

Here we go again...

[DarienLake:D]

I am glad to see Six Flags is turning around. Maybe when they get out of debt ticket prices will drop a little so it would attract more families because a family of 4 (2 adults & 2 kids) at Darien Lake would cost $129.96 without tax. And say SFNE which is slightly smaller then Darien Lake it would cost $147.96 without tax. And even parking... I thought Darien Lake's parking was a bit pricey till i saw the price for basic parking for most of the SF parks. Parking is $8 a day at DL and season parking is $19. SFNE basic parking is $15 and season parking is $50 Now i know SFNE is open longer then Darien Lake. Darien Lake is opening May 8th. And SFNE is already open on weekends with the exception of spring break they opened April 10th. Now you would think the park thats open less would be the more expensive one when it comes to things like that. Also before Six Flags sold Darien Lake park admission was $39.99 without tax. The next year after the sale it was $37.99 and then 2008 when motocoaster opened it went down again to $35.99. 2009 it only went up a dollar. And 2010 its back to $39.99 but thats after 1 roller coaster, a water park expansion, new cabins for the campground ext ext all there doing for 2010. By the way im not using Darien Lake cause im in love with it. But more as an example because its an Ex six flags park. And i used SFNE because i am looking into going to that park this summer i am still interested in Six Flags parks i have always liked them but once i heard about the debt i was kind of glad they turned Darien Lake over. i was afraid that six flags would of went under like example hard rock park/ Freestyle Music Park

[cory]

Here we go again...

What do you mean here we go again nobody knows what is going to happen with Chang there is still going to be speculations about it.

In three more years Six Flags will be back on top with all these great deals they got like play passes only for Thirty dollars. Another reason was Kentucky Kingdom was killing Six Flags KK was making loose money. Its really Six Flags own fault because they was not even adding ny rides tot he park and was not operating right. Kentucky Kingdom is one of the reasons why Six Flags file Bankrupt. Six Flags got a very bright future.

[nitrofan]

^I really just said that because unless someone has any real information on the trial, there really is no use discussing Chang anymore. Until we have anymore information, it's just beating a dead horse.

[Austin]

Its official. Chapter 11 is in the rear window and the future is looking bright. Also managed to regain some of my respect by getting rid of that idiot Snyder.

[Vic]

Snyder is gone? Eh they still have Shapiro though...

[Austin]

Still half as evil. Now if only the redskins can get rid of him football might be enjoyable in washington.