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Six Flags Files For Chapter 11 Bankruptcy

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Published: June 13, 2009 at 10:29 AM

Earlier today, Six Flags filed for chapter 11 bankruptcy. The company has more than $2 billion of debt.

According to Mark Shapiro, President and CEO of Six Flags, “The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets. As a result, we are cleaning up the past and positioning the Company for future growth.”

Shapiro said this is a plan to cut off all of the debt so that Six Flags can rise back up and be as competitive as ever.

“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. ”

Bankruptcy does not mean that the company is defunct or that the parks are closing down. It simply means that a court will oversee the restructuring of the company's debt, instead of the company trying to do that on its own, as it has for the past many months.

Update from Robert: Here is a statement that Magic Mountain President Jay Thomas just e-mailed:

Just to remind you, this is a back of house issue of our parent company that will have no impact on Six Flags Magic Mountain & Hurricane Harbor, or any of the Six Flags Parks. We will be open each and every scheduled operating day and continue to plan for our future. In fact, we are actively planning for our 50th celebration in 2011 - guaranteed to be the biggest celebration in our company's history.

The progress we have made at Six Flags Magic Mountain over the past three years continues to impress the guests who visit. We set all time records in our Guest Satisfaction Scores at our property in 2008. With additions such as X2, Thomas Town and the ALL NEW coaster Terminator Salvation The Ride, we have a product offering for thrill-seekers of all ages.

We are the absolute best value in town, hands down! We are here to stay, and thanks to the restructuring, we will be staying for many years to come.

Also, for first-time visitors to Theme Park Insider, we are the news source that first broke the news of Six Flags' debt difficulties, way back in June 2002 when the chain was run by management from the former Premier Parks.

Here is some other, more recent, coverage from TPI on Six Flags' finances:

Readers' Opinions

From Robert Niles on June 13, 2009 at 11:25 AM
On my Facebook wall, on March 11, I predicted "early June" for the Chap 11 filing. Thankyouverymuch.

That said, I also have said that I think the filing would be a good thing for the company, as it cannot continue to suffer under the amount of debt that it inherited from the Premier Parks management. The company's got some good management in place, and if it gets some financial relief from bankruptcy, I think Six Flags could be well positioned for the 2011 season and beyond.

This season is what it is already. My only concern is how bankruptcy might affect 2010, but frankly, how the economy goes in the next few months will have more to say about that than a Chap 11 filing will.

From Wok Creative on June 13, 2009 at 11:21 AM
I thought it was nice and a great gesture that a letter was sent via e-mail to all passholders, including a FAQ page, explaining it all, and that no one should worry about the local park.
From John Quinteros on June 13, 2009 at 11:46 AM
I really hope Six Flags can get out of bankruptcy. I hate to see Six Flags Magic Mountain close down. They have some cool roller coasters there!
From Anthony Murphy on June 13, 2009 at 12:24 PM
Here is the email that I got:

Dear Season Pass Holder,

You may have read about how Six Flags, Inc. is restructuring its debt. We want you to know that Six Flags Great America will be here for your family, this summer and for years to come.

Six Flags Great America will be open all season long.
From hot summer concerts to Fright Fest, Six Flags Great America will be open for business, the business of fun. As always, we continue to offer one of the best values in family entertainment, just a car ride away.

Expect great things throughout 2009.
We've introduced Buccaneer Battle, an awesome new water adventure ride. We launched fun new shows like The Best of Dick Clark's Bloopers. We're hiring staff, giving you and your family more dining options, and bringing you top music acts like Jesse McCartney, Raven-Symoné, and Metro Station.

If you would like more information, we invite you to read our RESTRUCTURING FAQ .

Thank you for being a Six Flags Great America Season Pass holder. See you at the park.

Sincerely,

Charles H. Salemi

President
Six Flags Great America


BTW, I have asked SFGA how its looking for the future and they seem to be not sweating at all. I think its a sad day for the entire company, but individual parks vary. I mean SFGA has done a bunch of improvements and paired up with a resort in the area to give their guests exclusive perks.

From Derek Potter on June 13, 2009 at 2:13 PM
It was pretty much inevitable that a restructuring would have to happen. They have dividends to pay out this year, and 1.8 billion dollars in debt is a lot to handle, particularly for a company that is just now starting to crawl out from under the rubble that previous management left behind. I've heard pretty much nothing but stories of improvement and positive trip reports so far this year, and gasp...a positive review of Magic Mountain's new coaster by this site.

If this is the way that they have to deal with the upcoming bills, then so be it. It seems that restoration of the Six Flags brand is underway (albeit slowly), and the numbers suggest that the company is indeed capable of building quality amusement attractions and entertaining people while still being profitable. I'm still expecting some great numbers from their parks this year.

My business travels have brought me to Louisville, Ky for a few months. Far be it from me to not stop by and pay the local park a visit. Keep an eye out for an in depth report from Six Flags Kentucky Kingdom...coming soon.

From TH Creative on June 13, 2009 at 5:16 PM
Best wishes to Six Flags and (more importantly) its employees.

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