Six Flags files Bankruptcy

[ALS]

Six Flags Inc., the world's largest regional amusement-park company, filed for bankruptcy protection early Saturday.

The theme-park company, shouldering more than $2 billion in debt, had been racing to restructure outside of court, negotiating with lenders, selling parks and laying off staff. 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, whose theme parks attract more than 25 million visitors a year, said it filed Chapter 11 with a prearranged reorganization plan that garnered unanimous approval from its lenders' steering committee. The plan would deleverage Six Flags' balance sheet by about $1.8 billion and eliminate more than $300 million in preferred stock obligations, the company said.

Low consumer confidence kept attendance down at Six Flags' 20 parks, which dot several cities across North America, including Chicago, San Antonio and Mexico City. Revenue fell and the company delayed certain debt payments.

Six Flags' Chapter 11 filing marks 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 stake.

In a statement on the filing, Six Flags didn't address Mr. Snyder's stake. A Six Flags spokeswoman didn't immediately return a call seeking comment.

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.

"The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets," said Mark Shapiro, Six Flags' chief executive, in a statement. He said operations of the company's parks would be unaffected by the filing and that Chapter 11 protection was sought solely to "clean up the balance sheet."

Also losing out on Six Flags' financial rollercoaster: Microsoft Corp. founder Bill Gates, whose Cascade Investment LLC owned about 10.2 million shares.

Six Flags failed to get last-minute concessions from lenders out of court. A deadline for debt holders to swap certain notes for equity expired Friday night. The park operator had extended that deadline by more than two weeks after falling well short of a 95% targeted acceptance rate.

Mr. Snyder's team, led by Mr. Shapiro, a former ESPN executive, had made some progress of late. Six Flags sold 10 parks and laid off about 300 workers. It tried to make its parks more "family friendly," banning smoking in most areas.

Last year, Six Flags brought in more cash than it spent for the first time. The company's losses narrowed in 2008 to $112.9 million, about half those of a year earlier. Sales nudge 5% higher to about $1.02 billion.

But last summer's record fuel prices, plunging consumer confidence and deteriorating credit markets weighed on Six Flags' balance sheet. The company lost even more money when the recent swine flu outbreak forced a temporary closure of its park in Mexico City.

http://online.wsj.com/article/SB124489639859012503.html

[Johannes_Paulsen]

I was always more of a Cedar Point fan.... but still, Six Flags Over Texas in Arlington, TX was the first big amusement park I ever went to as a kid. Hope that doesn't go away.

[dc dalton]

WOW! Didn't see that one coming.

I was always more of a Cedar Point fan.... but still, Six Flags Over Texas in Arlington, TX was the first big amusement park I ever went to as a kid. Hope that doesn't go away.

Cedar Point ROCKS! Used to go every summer when I lived in Akron

[unclejumbo]

Where's the government? Isn't Six Flags "too big to fail"? It's nice to see that at least some companies are proceeding as our system was designed. I'm sure when all is said and done, they will be a leaner, stronger company without our tax dollars being flushed down the shitter.

[D-FENS]

Where's the government? Isn't Six Flags "too big to fail"?

Probably because their labor wasn't unionized AND a vocal supporter during the campaign

[Tequila Sunrise]

Are they going to lay off the old man in the commercial that shouts, "six flags"?
Man I hope so. The six flags out here in Jackson, NJ in my opinion went down hill a long time ago. It was great when it first opened up as Great Adventure, but boy if there was ever a place in NJ where they should allow you to carry a gun , this would be it. It's like thug Disney Land. I stopped going there many years ago. Oh well, what do you think they will do with all their safari animals?
There's a lot of property there, some developer will get his hands on it.

[Pector55]

Where's the government? Isn't Six Flags "too big to fail"? It's nice to see that at least some companies are proceeding as our system was designed. I'm sure when all is said and done, they will be a leaner, stronger company without our tax dollars being flushed down the shitter.

The government offered a bailout but it required Six Flags to redo all their roller coasters to turn to the left.

[PisnNapalm]

Kennywood is still my favorite amusement park.

[camper]

The government offered a bailout but it required Six Flags to redo all their roller coasters to turn to the left.

And to pause long enough while upside down, so as to shake any valuables out of their pockets to be collected in a big "CHANGE" barrel below.

camper