The fight for control of theme-park operator Six Flags Inc. is ending in a settlement.
Holding company bondholders argued at the confirmation hearing that began March 8 that Six Flags' plan would allow bondholders of the operating company to take over "at a substantial discount" to the value of the business.
Six Flags operates Great America in Gurnee.
The holding company bondholders were advocating an alternative plan where the operating company noteholders would be paid in full while the term and revolving credit loans would be reinstated.
In the compromise announced in the Delaware bankruptcy court on March 19, the holding company bondholders will buy the new equity for cash. Combined with new loans, the cash infusion is to provide full payment with interest to operating company unsecured creditors, and pay off the $420 million owing to the operating company bondholders and $1.1 billion owing to the senior secured lenders.
Bondholders and unsecured creditors of the holding company will take the new stock and the ability to participate in a rights offering. A regulatory filing by Six Flags said that the terms of the rights offering are "yet to be determined." Terms of the new plan are "not finalized," the company said.
Existing preferred and common shareholders still receive nothing.
The judge warned Six Flags and the operating company noteholders that he was "highly likely" to allow other plans to be filed if the company's plan wasn't approved at the confirmation hearing.
The Six Flags Chapter 11 petition in June listed assets of $2.9 billion against debt totaling $3.4 billion, including a $850 million secured term loan and a $243 million revolving credit.
New York-based Six Flags filed under Chapter 11 with 20 theme parks, including 18 in the U.S. The parks have 800 rides, including 120 roller coasters.
The case is Premier International Holdings Inc., 09-12019, U.S. Bankruptcy Court, District of Delaware (Wilmington).