Six Flags noteholders submit plan proposal, seek board acceptance

By Caroline Salls

Pittsburgh, Nov. 30 - An informal committee of Six Flags, Inc.'s senior noteholders has submitted an alternative reorganization proposal to the company's board of directors and urged the board to accept the noteholders' plan, according to a news release.

The noteholders said their plan would provide higher recoveries to Six Flags' creditors than the company's plan.

Specifically, the noteholders said the company's plan "unfairly provides preferential treatment to holders of a series of 12¼% notes issued by Six Flags Operations to the detriment of the SFI noteholders."

According to the release, the noteholders' plan:

• Pays lenders in full either with cash or through the reinstatement of their debt;

• Pays Six Flags Operations noteholders in full with cash as opposed to receiving common stock and the ability to participate in a rights offering; and

• Allows Six Flags' noteholders about 19% of the new common stock in the reorganized company and rights to participate in a convertible preferred stock offering to purchase as much as 81% of the new common stock.

In contrast, the noteholders said the company's plan gives Six Flags noteholders 5% of the new common stock.

This alternative reorganization plan is supported by noteholders owning more than $500 million of the roughly $870 million in senior notes issued by Six Flags, according to the release.

"The debtors are currently wasting valuable estate resources pursuing a plan that is not confirmable," the noteholders said in the release.

"The SFI noteholder plan allows the holders of SFI notes to own nearly 100% of the new common stock as compared to merely 5% in the debtors' plan," the noteholders said in a letter to the board.

"There is no question the SFI noteholder plan maximizes the recoveries of all creditors of the debtors, and more fairly allocates the value of their estates."

A hearing on the disclosure statement for Six Flags' plan is scheduled for Dec. 4.

Six Flags, a regional theme park company based in New York, filed for bankruptcy on June 13 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-12019.

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