Six Flags committee objects to plan, cites valuation, cram down

By Caroline Salls

Pittsburgh, March 1 - Six Flags Inc.'s official committee of unsecured creditors objected to confirmation of the company's proposed plan of reorganization, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The committee said the plan contains "several fatal flaws that, as a matter of law, render it incapable of confirmation."

Specifically, the committee said the valuation of the company is artificially low under the proposed plan, resulting in the delivery of value to Six Flags Operations noteholders that far exceeds the allowed amount of their claims, in violation of the absolute priority rule.

In addition, the committee said the company and a Six Flags Operations noteholders committee are trying to cram down the plan over the objection of an overwhelming majority of Six Flags Inc. creditors.

The creditor group also said the plan does not meet the good faith requirements of the Bankruptcy Code.

"As a representative of, and fiduciary for, unsecured creditors at all levels of the debtors' capital structure, the official committee believes that its role is to work towards a fair allocation of value amongst all such creditors, while allowing the debtors to emerge promptly as an adequately capitalized and viable business," the committee said in the objection.

The plan confirmation hearing is scheduled to begin on March 8.

Six Flags, a regional theme park company based in New York, filed for bankruptcy on June 13, 2009. Its Chapter 11 case number is 09-12019.

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