Great Adventure Outpost
Industry => Six Flags News => Topic started by: GADVwow on December 11, 2009, 04:52:58 PM
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NEW YORK, Dec 11 (Reuters) - A U.S. judge on Friday approved a disclosure statement on Six Flags Inc's (SIXFQ.OB) plan of reorganization, pushing the bankrupt company closer to being able to solicit votes from creditors on the plan....
The next step would be a confirmation hearing. The judge today also heard debates about when it should be scheduled.
He:
...scheduled the confirmation hearing for two weeks in March. He emphasized that this was a hard deadline and scheduled several days of hearings for discovery and depositions before those confirmation hearings.
"It's going to be a hard schedule. People are going to have to comply with it," Sontchi said. "We've got to get this done."...
http://www.reuters.com/article/idUSN1126076720091211 (http://www.reuters.com/article/idUSN1126076720091211)
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Analysis: Six Flags Creditors See Value In Dick Clark Stake:
When U.S. television legend Dick Clark rings in his 36th new year in Times Square on Thursday night, some creditors of the bankrupt Six Flags Inc might ask themselves: How much is he worth?
As creditors fight for control of the U.S. theme park company, Six Flags' 39 percent stake in dick clark productions has drawn increasing attention.
Six Flags acquired the stake in the producer of TV shows like "The American Music Awards," "The Golden Globes," and "Dick Clark's New Year's Rockin' Eve" in June 2007 for $39.7 million.
This is not the biggest asset held by Six Flags, which runs 20 theme parks in North America, but it is growing to be one of the most contentious. The company's unsecured creditors demand to know more about what the stake is now worth, while other creditors are fighting over which Six Flags unit owns it....
http://www.forexpros.com/news/general-news/analysis-six-flags-creditors-see-value-in-dick-clark-stake-110418 (http://www.forexpros.com/news/general-news/analysis-six-flags-creditors-see-value-in-dick-clark-stake-110418)
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Thanks for the update. I wonder what they will end up valuing that at, and just how it will affect the deal.
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Since many will not look at the link, I think I'd do well to also list this quote from that same article:
...All this comes amid a creditors' fight over the value of Six Flags as a whole and who will control it when it exits bankruptcy....
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Six Flags Inc., the New York-based theme-park owner of Great Adventure in Jackson and other amusement parks across the nation, has approached JPMorgan Chase & Co., Bank of America Corp., Barclays Capital and Deutsche Bank AG to arrange an $830 million senior secured credit facility to finance its exit from bankruptcy.
The loans will include a $150 million five-year revolving credit facility and a $680 million six-year term loan, the company said today in a regulatory filing. The reorganization plan also includes a $150 million financing commitment from Time Warner Inc., Six Flags said....
Confirmation of the proposed plan is expected in March with the company exiting bankruptcy shortly afterwards, Six Flags said in the filing. Chapter 11 of the U.S. bankruptcy code allows companies protection from creditors while they work out a plan of reorganization.
Yesterday, Moody’s Investors Service assigned the proposed credit facility a B1 rating, which is four levels below investment grade. Moody’s said that the management team at Six Flags has “made progress in making the parks more family- friendly and generating incremental revenue from licensing and sponsorships.”...
http://www.app.com/article/20100107/BUSINESS/100107106/1003/Six+Flags+names+possible+banks+for++830+million+loans (http://www.app.com/article/20100107/BUSINESS/100107106/1003/Six+Flags+names+possible+banks+for++830+million+loans)
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Meh. WEll atleast this isnt as bad as ceder fairs bankruptcy
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Cedar Fair doesn't have a bankruptcy...yet.
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I wonder how the debt holders will like this plan. I have a feeling that someone will have an issue with Avenue owning a decent portion of the chain.
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Judge Rules Six Flags Bondholder Group Does NOT Have to Reveal Holdings:
http://www.reuters.com/article/idUSN0826288720100108?type=marketsNews (http://www.reuters.com/article/idUSN0826288720100108?type=marketsNews)
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I hope this all works out for the best. And its amazing how the view of Cedar Fair has changed in the last few years. You would have figured they would have learned from Six Flags Example.
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Mr. Kinzel is a firm believer in the model "Build a coaster, they will come. Need more money, raise the prices. Cut middle management, cut costs, build another coaster. And pay yourself and the higher ups very, very well."
It's a long Gary type Story.
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:D I see what you did there.
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Six Flags Creditors Seek Mediation:
Feb. 18 (Bloomberg) -- The creditors’ committee for theme- park operator Six Flags Inc. filed a motion yesterday proposing that the bankruptcy judge order the warring factions into mediation before they embark on a contested two-week confirmation scheduled to begin March 8.
The committee, which wants its mediation motion discussed at a hearing tomorrow, isn’t proposing a delay in the confirmation hearing. The committee, which is opposed to the company’s reorganization plan, proposes having the mediation begin “on an expedited basis.”
The committee reported in its motion that noteholders at the holding company and noteholders at the operating company level reached impasse on Feb. 16 and “are not communicating directly with each other.”...
http://www.businessweek.com/news/2010-02-18/six-flags-general-growth-tlc-chemtura-crescent-bankruptcy.html (http://www.businessweek.com/news/2010-02-18/six-flags-general-growth-tlc-chemtura-crescent-bankruptcy.html)
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Six Flags Wins Right To Present Own Plan Until April 5, Ruling On Mediation Motion Delayed Until February 23:
http://www.reuters.com/article/idUSN1922747620100219 (http://www.reuters.com/article/idUSN1922747620100219)
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Six Flags Creditors Near Financing Alternative Deal:
...The plan would pay in cash claims against Six Flags Amusement Park, said the bondholders, known as SFI noteholders.
These bondholders have opposed the plan proposed by senior bondholders, or SFO noteholders, and adopted by the company.
The SFI noteholders said the senior bondholders "refused to negotiate and are trying to acquire the company at a substantial discount in order to wrongfully cutoff the interests of the SFI notes."...
http://www.reuters.com/article/idUSN2520674820100226 (http://www.reuters.com/article/idUSN2520674820100226)
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Six Flags Current Management May Be Ousted:
...Six Flags Incumbent Management May Be on the Way Out
Incumbent management of Six Flags Inc. evidently will lose their jobs if holding company noteholders succeed in taking over the theme-park operator by winning confirmation of their competing reorganization plan....
The noteholders’ statement said they have identified a “highly experienced, industry leading management team” to take over once their plan is approved and implemented....
The contested confirmation hearing is scheduled to begin March 8....
http://www.businessweek.com/news/2010-03-01/general-growth-six-flags-visteon-magna-flying-j-bankruptcy.html (http://www.businessweek.com/news/2010-03-01/general-growth-six-flags-visteon-magna-flying-j-bankruptcy.html)
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:( Isn't it obvious enough that the current team didn't backrupt them? The company's money issues all revolve around debt and not how they are operating today. We may need to start a save Mark facebook instead of save Houdini because the thought of losing him and his team is rather concerning.
edit: typo fix
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Facebook won't help. A bankruptcy judge will decide the future of Six Flags, all based on what proposal will overall reap the most proceeds for the creditors...
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If some other company does buy six flags, will all the coasters stay there?
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Most probably...but the company is not for sale...who will run it and own it is the subject of the current litigation in bankruptcy court.
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Junior Bondholders Secure Financing, Two Week Trial Starts Monday:
http://www.reuters.com/article/idUSN0510694220100305 (http://www.reuters.com/article/idUSN0510694220100305)
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Showdown Begins Today In Bankruptcy Court, Snyder will NOT testify:
http://www.reuters.com/article/idUSN0817013920100308 (http://www.reuters.com/article/idUSN0817013920100308)
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http://www.businessweek.com/ap/financialnews/D9EALQ100.htm (http://www.businessweek.com/ap/financialnews/D9EALQ100.htm)
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http://dealbook.blogs.nytimes.com/2010/03/09/six-flags-c-f-o-takes-stand-in-ch-11-battle/ (http://dealbook.blogs.nytimes.com/2010/03/09/six-flags-c-f-o-takes-stand-in-ch-11-battle/)
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https://www.fis.dowjones.com/WebBlogs.aspx?aid=DJFDBR0020100308e638000dx&ProductIDFromApplication=&r=wsjblog&s=djfdbr (https://www.fis.dowjones.com/WebBlogs.aspx?aid=DJFDBR0020100308e638000dx&ProductIDFromApplication=&r=wsjblog&s=djfdbr)
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I'm happy you keep us in the loop. Google has NOTHING on you!
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The Wall Street Journal, in an article which requires a subscription, is claiming that Six Flags creditors suspect Six Flags senior management and Avenue Capital have a plan to merge with Cedar Fair post bankruptcy, and that Apollo Management would be a source of financing....A Cedar Fair spokesperson declined to comment, as has Avenue Capital, Six Flags' senior management's financial backer...
A short quote, which can be considered "fair use":
...Creditors of Six Flags speculate differently. They suspect investors led by Avenue plan to merge Six Flags with Cedar Fair once they gain control of the company in bankruptcy. Besides Avenue's pilgrimage to Sandusky, Ohio, they point to an email that indicated Six Flags' backers were eyeing Apollo Management LP as a potential source of investment....
A link cannot be provided, but if you are a subscriber, you can easily locate this article.
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This is just freaking scary. ummm.. I don't even know what to say.
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Yea...
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An update here helps. Read the last three paragraphs:
http://www.cleveland.com/business/index.ssf/2010/03/cedar_fair_facing_more_opposition_for_sale_to_private_equity_firm.html (http://www.cleveland.com/business/index.ssf/2010/03/cedar_fair_facing_more_opposition_for_sale_to_private_equity_firm.html)
Here they are:
...According to a story posted on the Wall Street Journal's Web site on Tuesday evening, creditors of bankrupt Six Flags believe that Apollo Global Management could be planning to merge Cedar Fair with Six Flags, if the investment firm succeeds in buying the Sandusky-based company.
According to the article, Six Flag's unsecured creditors think Apollo could be working with Avenue Capital Management, an investment fund that is leading the drive to take over Six Flags in Chapter 11. The Web site reported that Andrew Dash, an attorney representing Six Flag's unsecured creditors pressed Six Flag's Chief Financial Officer Jeffrey Speed during a bankruptcy hearing to tell him why representatives of Avenue Capital had made a visit to Cedar Fair.
Speed confirmed the visit, but said he could "only speculate" that Avenue was trying to learn more about the amusement park business now that it was committed to leading a $450 million equity raise to bail out Six Flags.
...
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Um, sure... Right. That makes perfect sense. Visit another park chain going bankrupt to learn how to run a park business. And I'm sure any chain, yet alone your most direct competitor would be happy to lend a hand lol. What a dumb cover.
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If Apollo is serious about merging Cedar Fair with Six Flags, they need to have their heads' examined. If ever there were a reason to vote NO on the merger proposal at Cedar Fair, this would be it. The timing for this Six Flags bankruptcy exit hearing could not be worse for one Richard Kinzel. I wonder if Avenue Capital met with Mr. Kinzel at Fridays, too? It's a two week trial for Six Flags, and it likely won't be over by 031610 (the day of the special vote for the Apollo-Cedar Fair merger).
Less than one week until the vote, and this comes out...
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That's just...special. I was curious about that WSJ article, but I have no subscription. My least favorite site to get links to.
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Six Flags note holders want committee vote nixed:
http://www.businessweek.com/ap/financialnews/D9EF7C5G0.htm (http://www.businessweek.com/ap/financialnews/D9EF7C5G0.htm)
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this is so confusing. Why would anyone want to combine Six Flags and Ceder Fair!
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I believe it is called monopoly power and pricing power...also known as money.
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:-\ I have a bad feeling about it (If it happens)
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UPDATE 1-Bondholders reach proposed Six Flags settlement
Fri Mar 19, 2010 1:18pm EDT
Stocks
Six Flags, Inc.
SIXFQ.OB
$0.10
-0.01-7.14%
12:49pm EDT
* Creditors reach proposal to end Six Flags bankruptcy
* Stark Investments-led bondholders to control company
* Management to receive up to 15 pct stake
By Tom Hals
WILMINGTON, Del., March 19 (Reuters) - Creditors ended their battle for control of Six Flags Inc (SIXFQ.OB) on Friday with a proposed deal in which junior bondholders will invest up to $725 million of new equity in the theme park operator, according to an attorney for junior bondholders.
The proposed deal also includes new debt of about $1.1 billion that will be used to pay off creditors and fund operations, according to Lance Laifer from Resilient Capital which owns the company's PIERS notes.
Junior bondholders, known as SFI bondholders and led by Stark Investments, will control the company, according to Laifer.
The deal also proposes giving up to 15 percent of the company's equity to management, according to Laifer.
The SFI group had earlier proposed replacing management.
Senior noteholders, known as SFO Noteholders and led by Avenue Capital Group, had been fighting for the last two weeks in court for their plan of reorganization, which had the support of the company.
Under their plan they would have taken control of the company, which operates 19 parks in North America.
The SFO notes will be paid in full under Friday's proposal, according to Laifer.
The company did not return calls for comment.
A spokesman for Avenue Capital Group declined to comment.
Stark Investments did not returns a call for comment.
The case is In re: Premier International Holdings Inc, U.S. Bankruptcy Court, District of Delaware,
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Update three:
http://www.reuters.com/article/idUSN1916902720100319 (http://www.reuters.com/article/idUSN1916902720100319)
IF the court approves, Avenue Capital is apparently frozen out. This would apparently mean the Apollo deal to buy Six Flags after acquiring Cedar Fair is kaput in many more ways than one....
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Much more on this, and about Dan Snyder:
http://www.businessweek.com/news/2010-03-19/six-flags-bondholders-halt-trial-for-talks-cfo-says.html (http://www.businessweek.com/news/2010-03-19/six-flags-bondholders-halt-trial-for-talks-cfo-says.html)
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http://sanantonio.bizjournals.com/sanantonio/stories/2010/03/15/daily40.html (http://sanantonio.bizjournals.com/sanantonio/stories/2010/03/15/daily40.html)
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Shapiro will STAY! Thank GOD!
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.
I can't understate the amount of relief reading that brought to me. Him getting removed was my biggest fear. I didn't think that he would, but you can never be 100% sure.
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Be careful. This plan is a proposal. It must be approved by the judge and the other creditors. It probably will be, but may not be.
And Mr. Snyder's role, regardless of what that article may say, is yet to be determined.
There are other issues...
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I've been hearing all along that nobody wanted Shapiro removed regardless. While anything is obviously possible, I think even those that were trying all of these options were/are impressed by his work. Were it not for the insane debt and high interest loans, the chain would now be insanely profitable.
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The article that Screamscape linked from BusinessWeek here (http://www.businessweek.com/news/2010-03-19/six-flags-bondholders-halt-trial-for-talks-cfo-says.html) makes it sound like Snyder is basically out.
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But wants back in. From that same article:
... Six Flags’ largest shareholders include Chairman Daniel Snyder, owner of the National Football League’s Washington Redskins. He owned 5.4 percent of Six Flags, or 5.28 million shares, as of October 2007, according to data compiled by Bloomberg.
His goal is to continue to be financially involved with the company, Shapiro said.
‘Substantial Investment’
“He intends to make a substantial investment in Six Flags at the right time,” Shapiro said.
A spokesman for Snyder couldn’t be immediately reached for comment....
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Six Flags Amends Bankruptcy Plan:
... The newest plan leaves in place CEO Mark Shapiro and gives him the right to name another board member. However, he cannot name current Chairman Daniel Snyder without the approval of the new equity investors.
The plan also leaves in place Shapiro's proposed salary and bonuses, which both groups of bondholders criticized before the company adopted their plans.
Shapiro will receive an annual salary of $1.3 million, unchanged from his prebankruptcy base pay. He can also collect other bonuses including up to $3 million for bringing the company out of Chapter 11....
http://www.reuters.com/article/idUSN0517577520100405?type=marketsNews (http://www.reuters.com/article/idUSN0517577520100405?type=marketsNews)
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This coming Friday is probable decision day for Six Flags control:
...Six Flags management supports the Stark proposal and has dropped support for a plan backed by bondholders led by Avenue Capital Group, Reuters said. Six Flags top management would retain their jobs under the Stark plan, Reuters said.
The agreement is expected to go before the bankruptcy court for approval on Friday, Reuters said....
http://milwaukee.bizjournals.com/milwaukee/stories/2010/04/12/daily1.html (http://milwaukee.bizjournals.com/milwaukee/stories/2010/04/12/daily1.html)
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Friday's hearing may get interesting:
http://www.prnewswire.com/news-releases/resilient-capital-management-files-motion-in-six-flags-bankruptcy-proceeding-90932064.html (http://www.prnewswire.com/news-releases/resilient-capital-management-files-motion-in-six-flags-bankruptcy-proceeding-90932064.html)
Resilient Capital Management Files Motion in Six Flags Bankruptcy Proceeding
OBJECTS TO INACCURATE VALUATION WORK INTENDED TO SUPPORT MANAGEMENT TEAM'S INTERESTS AT EXPENSE OF PIERS AND COMMON SHAREHOLDERS
NEW YORK, April 15 /PRNewswire/ -- Resilient Capital Management, a holder of Six Flags Preferred Income Equity Redeemable Shares ("PIERS") notifies all PIERS (OTC Bulletin Board: SIXOQ) and common shareholders of Six Flags (OTC Bulletin Board: SIXFQ) concerning its Motion to Participate in the Confirmation Hearing (Premier International Holdings Inc., et al., Case No. 09-12019, Docket Number 1989) scheduled for April 28, 2010 which it filed last night in the bankruptcy court in Delaware. The motion can be accessed at http://www.kccllc.ne (http://www.kccllc.ne)...00000000011.pdf.
In its motion Resilient highlights the valuation work performed on Six Flags by Amherst Capital Partners, L.L.C. - http://www.amherstpartners.com (http://www.amherstpartners.com).
Amherst valued the company at a total enterprise value of $2,679,000,000. At this valuation the holders of the PIERS are entitled to approximately a 100% recovery or approximately $300 million. This compares to the current market capitalization of the PIERS of $2.75 million (SIXOQ closing price $0.25 per share - 11 million PIERS shares outstanding).
This contrasts sharply with the inaccurate valuation work performed on the company by Houlihan Lokey and Lazard Freres ( LAZ). These purported "experts" valued the company at approximately $1.5 billion only days before the SFI Bondholder group offered a deal which the market valued at between $2.3 and $2.5 billion.
The SFI Bondholders are poised to take over control of the company, having wrested control from the common shareholders by entering into a transaction which benefits management at the expense of the PIERS and common shareholders. According to Resilient's motion, "The valuation contest has been skewed such that it has been conducted within an artificial range defined by the parties with the resources to pay the costs of admission to the contest and by a management team with a more than $100 million vested interest in a particular outcome."
Lance Laifer, CEO of Resilient Capital Management said, "A cottage industry of lawyers is conspiring with management teams to take companies into bankruptcy and enrich management teams at the expense of the very shareholders they are supposed to be protecting and representing. This motion is about much more than just Six Flags. When a management team can take over a company, drive it into bankruptcy and then emerge with ten times more equity than it had prior to the bankruptcy filing, the system is seriously messed up and people - mostly individual investors - are losing massive amounts of money unnecessarily". Laifer continued, "We filed our motion at great expense, because we believe that real people are losing real money on the basis of faulty valuation reports. Resilient is committed to making sure we do our part to highlight and fix the problem that seemingly has developed in the Delaware bankruptcy court and corporate boardrooms throughout America."
Resilient's motion alleges a pattern of conduct by the SFI bondholders and the Six Flags management team, including the following:
* The SFI bondholders managed to raise over one billion dollars of consideration at approximately a $2.5 billion valuation even though it was battling management at the time it raised the capital.
* The lawyers and other professionals involved in this case are working off of a wrong valuation for the current deal on the table and that this incorrect and low valuation is being utilized to encourage the Honorable Judge Christopher S. Sontchi to confirm a plan of reorganization that is based upon an artificially low valuation that fails to address the points raised in the valuation performed on behalf of Resilient.
* Based on Amherst's valuation, management is poised to achieve a $150-200 million jackpot for steering the company into and out of bankruptcy and wiping out shareholders. It also points to under-explored and under-examined pockets of potentially substantial value, including Six Flags TV and the value likely to be realized from Six Flags' licensing business.
* The Debtor's management team is continuing to clearly violate its fiduciary responsibilities to the PIERS and common stockholders of Six Flags.
* During March at the confirmation hearing, management stressed that the company was off to a poor start in 2010, which contrasts with a recent NY Post article in which Mark Shapiro stated that, "we're having a terrific spring right now."
This motion supplements an earlier motion made by Resilient which calls for a Trustee to be appointed to replace management -http://www.kccllc.ne...00000000004.pdf
Resilient is encouraging all shareholders of Six Flags to object to the Debtors' current plan of reorganization. Any such objections should be filed with the Delaware Bankruptcy Court at the following address:
Honorable Christopher S. Sontchi
United States Bankruptcy Court
District of Delaware
824 Market Street, 3rd Floor
Wilmington, DE 19801
T: 302-252-2900
Bankruptcy court in Delaware
To request more information or a copy of the Motion to Participate in the Confirmation Hearing scheduled for April 28, 2010 please contact Lance Laifer at laifer@gmail.com ("laifer@gmail.com%C2%A0")(Tel. 646-734-6657).
SOURCE Resilient Capital Management
Back to top RELATED LINKS
http://www.amherstpartners.com (http://www.amherstpartners.com)