Six Flags noteholders group asks court to terminate exclusivity

By Caroline Salls

Pittsburgh, Sept. 15 - An informal committee of holders of Six Flags Operations, Inc.'s 12¼% senior notes due 2016 have asked the U.S. Bankruptcy Court for the District of Delaware to terminate the company's exclusive right to file and solicit votes on a plan of reorganization, according to a Monday court filing.

The committee has also asked the court to postpone the hearing on approval of the disclosure statement for Six Flags' plan of reorganization.

According to the motion, "exclusivity should be terminated in these cases because the debtors have turned a blind eye on a superior, fully committed alternative proposal, creditors should have the right to choose which plan is superior, and the debtors' management team and board of directors are racing ahead with a plan that enriches themselves at the expense of virtually every other creditor constituency."

The noteholder group said it has proposed a plan that includes a fully backstopped $450 million equity rights offering and provides each of the debtors' stakeholders, other than the six members of the senior management team, with the same or better treatment than provided under the management plan.

Specifically, the noteholders said under their plan:

• Six Flags, Inc.'s noteholders would receive 3.6% of the new common stock in the reorganized company, warrants to purchase an additional 5% of common stock and rights to participate in an equity offering for an additional 6.1% of stock, compared to just 1% of stock under the company's plan.

• Six Flags Operations noteholders would receive 28% of the new common stock and rights to participate in the equity offering for an additional 61.7% to 69.4% of the stock, compared to 7% of new stock under the company plan; and

• Lenders would receive full payment in cash and the opportunity to participate in a new term loan, versus 92% of new common stock under the company plan.

"Despite the fact that the alternative plan is a viable alternative and provides the debtors' creditors with over 375% more value in enhanced recoveries, the management team has failed to give the alternative plan any meaningful consideration," the noteholders said in the motion.

Six Flags, a regional theme park company based in New York, filed for bankruptcy on June 13. Its Chapter 11 case number is 09-12019.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.