Six Flags bankrupt, but the rides will go on

Posted Jun 15th 2009 12:20PM by Beth Gaston Moon
Filed under: Bad News, Recession

Over the weekend, Six Flags Inc. (OTC: SIXF) announced it was filing for Chapter 11 bankruptcy (cue sad-trombone noise here). The company was saddled with $2.4 billion in debt and is taking this opportunity for a fresh start. None of the company's 20 parks -- located throughout North America -- will be closed. All Six Flags employees still have jobs, as well, so potential patrons should not feel as though corners are being cut.

Six Flags spokeswoman Sandra Daniels told the press that "This restructuring will have no impact on families who come out to our parks."

CEO Mark Shapiro posted a statement on the Six Flags website asserting "This process is strictly a financial restructuring of our debt ... this is about the past. This is about debt that's been around for just too long."

The firm's restructuring plan will de-leverage its balance sheet by roughly $1.8 billion and wipe out more than $300 million in preferred stock obligations. Currently, Six Flags has about 97.7 million shares of common stock and 1.1 million shares of preferred stock. Some folks affected by this news include Washington Redskins owner Daniel Snyder, who holds a 6% stake, and Bill Gates, whose Cascade Investment fund took an 11% stake in the beleaguered theme-park company.

SIXF shares plunged nearly 55% this morning to hit the 12-cents-per-share mark.

Beth works for The Options News Network (www.ONN.tv), which provides daily stock and options commentary. The above comments are not intended as trading advice.

Tags: bankruptcy, Bill Gates, chapter 11, Daniel Snyder, inthenews, Mark Shapiro, Sandra Daniels, six flags, SIXF, theme parks