Six Flags Inc., one of the nation's largest amusement-park companies, has hired bankruptcy counsel and financial advisers as it fights to avoid a bankruptcy filing amid a mountain of debt.
The company, which has 120 roller coasters and more than 25 million visitors a year, is trying to negotiate with creditors so it can avoid seeking protection under Chapter 11 of the U.S. Bankruptcy Code. But, according to a securities filing, it "may be compelled to seek an in-court solution in the form of a prepackaged or prearranged filing."
"Our creditors are very supportive, but obviously there are issues we need to address," said Six Flags Chief Financial Officer Jeff Speed in an interview.
"We are trying to accomplish something on a consensual basis," added Mr. Speed, who confirmed the hiring of the advisers. "That is always preferred, but I can't speculate on what the ultimate resolution will be."
A bankruptcy filing would likely wipe out the ownership stake of Washington Redskins owner Daniel Snyder, who took control of Six Flags in a public and contentious proxy fight in late 2005 and then brought in his own management team.
"Stockholders would have been better off hiding their money under a mattress" than investing in the company under the prior management, Mr. Snyder wrote in a letter to Six Flag shareholders in October 2005, during the proxy battle. At the time, Six Flags shares were trading at about $7.25. Thursday, they closed at 19 cents on the New York Stock Exchange.
Pot, meet kettle.
It is an interesting timeline of events as I go back through the old posts. You can see some them in orderhere
Now, the story of Six Flags is not one of a bad economy, although it is certainly a factor. The main story is a poorly run operation saddled with far too much debt and a lousy consumer experience.
Teenagers love the place, just ask any of them. It is designed for them from the rides to the entertainment to the layout. But, teenagers are not where the money is. It is families that are. Six Flags is quite possibly the least family friendly place I have ever been too. That is their downfall.
Since my boys were born we have done Disney (NYSE:DIS), Hershey Park (NYSE:HSY), Sesame Place, Canobie Lake N.H., Storyland N.H. and Santa's Village N.H.. All were incalculably better experiences than Six Flags. Talking to other folks, this is not an uncommon experience.
Six Flags will go under, of that there has never been a doubt, I wish the next owners better luck. They have great properties, they just need better people to run them.