Six Flags Inc. has finally resolved a many weeks long dispute between two groups of creditors and expects to exit Chapter 11 bankruptcy as early as the first week of May. Bankruptcy Judge Christopher Sontchi has indicated that he will accept the settlement offer and approve the company's bankruptcy reorganization plan rather quickly.
Under the settlement, senior noteholders owed about $420 million will receive $470 million in cash, Harner said. Those noteholders had filed court papers claiming they were owed interest on their debt because it was being paid off early.
A group of investors led by Stark Investments of the Milwaukee suburb of St. Francis, Wis., will buy $725 million worth of the new stock being issued by Six Flags to help pay off its debts.
Shareholders have failed in their efforts to stop the company's bankruptcy exit so that they could prove that Six Flags could afford to pay them something. The bankruptcy judge rejected their request to provide testimony about the company's finances saying that such testimony was not necessary. As it stands, Six Flags' shareholders will not receive any payment from the Chapter 11 bankruptcy and will not even have ownership of part of the post-bankruptcy company.
When Six Flags filed Chapter 11 bankruptcy last June, it hoped to cut its debt load down by $1.8 billion. When the company's Chapter 11 bankruptcy plan is approved they will be left with about $1.5 billion in debt and ownership of the company will be split amongst several creditors.