Six Flags filed for Chapter 11 bankruptcy protection two days ago. TradingMarkets has the scoop:
On June 13, the New York City-headquartered company said that it and certain of its subsidiaries have begun reorganization proceedings under the Chapter 11 Bankruptcy Code. The company then said that the plan would result in a deleveraging of its balance sheet by approximately $1.8 billion, as well as the elimination of more than $300 million in mandatorily redeemable preferred stock obligations.
The companies included in the bankruptcy filing were Six Flags, Inc., Six Flags Operations Inc., or SFO, and Six Flags Theme Parks Inc., or SFTP, and certain of SFTP’s domestic subsidiaries.
According to Mark Shapiro, President and Chief Executive Officer of Six Flags, the current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in the challenging financial markets.
“No one should be confused about what a bankruptcy process means for Six Flags. Following a record year of performance in 2008, which completed the three-year turnaround of our system-wide park operation, this action to clean up the balance sheet paves the way for a full revival of the company. We will emerge from this process stronger and more competitive than ever,” Shapiro noted.
A Forbes article said that the company tried to reorganize out of Chapter 11, but failed. The article also implies that Six Flags’ problems have a lot to do with Washington Redskins owner Daniel Snyder, who owns a 6% stake as the result of a 2005 proxy battle:
Billionaire Washington Redskins owner Daniel Synder (SIC), who ranks 701st on our most recent list of the World’s Richest People with a fortune we reckon at $1 billion, owns 6% of Six Flags. He became chairman three and a half years ago, installing new managers to turn round a company that hadn’t posted an annual profit since 1998.
It had losses of $558.8 million in the two years since Synder (SIC) became chairman.
Interestingly, the Forbes article misspelled Snyder’s last name as “Synder.” According to CityPaper’s Dave McKenna, who has been following the Six Flags/Snyder evolution for quite a while, this isn’t the first time this misspelling has happened. Sometimes people do it deliberately, to spite Snyder. And Snyder hates it.
Is Snyder to blame? You’ll have to draw your own conclusions. But if opening a themed line of kids’ hair salons in light of monumental debt is any indication of Snyder’s business prowess, the answer is obvious.
Todd Sullivan has more on Snyder and Six Flags.