Six Flags Inc. has emerged from Chapter 11 bankruptcy after a yearlong bankruptcy process that faced numerous obstacles. The company's Chapter 11 bankruptcy has allowed it to reduce its debt load by $1.7 billion and it has acquired $725 million in equity committed by new shareholders.
In the initial phases of Chapter 11 bankruptcy Six Flags Inc. was going to back a bankruptcy plan proposed by Avenue Capital Group bondholders; but just as negotiations were coming to close, the company switched sides in favor of a bankruptcy plan proposed by Stark Investments bondholders. The Stark plan, which was approved by the bankruptcy court, allows Six Flags to use new debt and an equity investment by Stark Investments led bondholders to pay the claims of secured lender and the Avenue Capital led bondholder, while leaving CEO Mark Shapiro as head of the company. The plan and Shapiro's hefty $1.3 million a year salary faced heavy criticism. But proponents of the Chapter 11 bankruptcy plan insisted that Shapiro deserved his salary because of his pivotal role in helping the company safely emerge from Chapter 11 bankruptcy.
Six Flags Inc. and its individual theme parks have shown satisfaction with the outcome of their Chapter 11 bankruptcy and hope that the reduction of debt won't be the only benefit they see. Access to cash for growth, maintenance and expansion of services is also a desired outcome from bankruptcy, theme park owners hope.
"This reorganization constitutes the final step in the repositioning of Six Flags globally," Six Flags Discovery Kingdom Park President Eric Gilbert said. "While the day-to-day operations of our park were never impacted, it's very exciting to envision a future that will allow us to rapidly grow and expand the array of services and entertainment for every single guest."