Six Flags filed Chapter 11 bankruptcy in June listing assets of $2.9 billion against debt totaling $3.4 billion, including an $850 million secured term loan and a $243 million revolving credit. But the fight for control of the bankrupt amusement park may end in a Chapter 11 bankruptcy settlement agreement if the plan is approved by the bankruptcy court.
In the compromise announced in the Delaware bankruptcy court on March 19, the holding company bondholders will buy the new equity for cash. Combined with new loans, the cash infusion is to provide full payment with interest to operating company unsecured creditors, and pay off the $420 million owing to the operating company bondholders and $1.1 billion owing to the senior secured lenders.
Bondholders and unsecured creditors of the holding company will take the new stock and the ability to participate in a rights offering. A regulatory filing by Six Flags said that the terms of the rights offering are "yet to be determined." Terms of the new plan are "not finalized," the company said.
The holding company bondholders were fighting for an alternative Chapter 11 bankruptcy plan that would allow the operating company noteholders to receive full payment while the term and revolving credit loans would be reinstated. In either Chapter 11 bankruptcy plan existing preferred and common shareholders still receive no reimbursement.
Despite the bankruptcy settlement, the bankruptcy judge warned Six Flags and the operating company noteholders that if the bankruptcy plan was not approved at the confirmation hearing, he was "highly likely" to allow competing bankruptcy plans to be filed with the bankruptcy court.