Dear theme park friends. I am confused. I read Mark Shapiro's comments that Six Flags parks will not be affected by the bankruptcy filing but I am not sure I buy that. How can Six Flags recover from this bankruptcy? Will it have to sell some parks? I don't understand bankruptcy I have to say but I can't see creditors just not wanting to collect billions of dollars owed to them.

I went to Six Flags St Louis last year and this year. I was also able to visit Six Flags Gurnee, Il last year. I had a great time as far as rides. The food prices and parking are more expensive than other parks I have been too(Dollywood, SDC, and Holiday World). The parks were clean and most employees were friendly. There were some rowdy teenagers but I have seen them almost at every park to one degree or another.

Just thought I would start this to see what more experienced theme park goers predicted. Cedar Fair is trying to reduce its debt by selling properties. I don't know what SF will be foreced to do. Also what about all the overseas parks they have planned. Seems like it would be hard to build more parks when you are already bankrupt! I am anxious to get some feedback.

Bankrupt does not mean the parks are shutting down, it just means that there is no money in the banks. I'm not an accountant, and I don't know the details, but I know many large companies go bankrupt sometimes, and it allows them to restructure and reorganize operations to be more profitable. If you have nothing to lose, than you have everything to gain.

Forgive me if I'm mistaken.

Basically I've had the same impression as Jerry. We've had this hefty saddle bag since the late 90's-earlier part of this decade. The new Premier went crazy with the European acquisitions. I bet NITRO, S:UF and later El Toro at SFGADV are all a part of this massive accumulation of debt. As I said in response to our news story I'm glad the park already started to try to make some positive moves for itself like selling parks a few years ago before Cedar Fair has even done it. It looks like they have just approached that possible scenario. We beat CF to the point. I know SFGADV is marquee enough that someone will own and run it. I'm not sure of the chances of the chain being broken up but I have optimism in all this. Reinvention-GM, Reinvention Six Flags.

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Thrillnetwork Moderator - Sophomore Original sn: CHILLERLC1
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This should ease your minds:



Here are two common types of bankruptcy that we have seen a lot in recent years of the theme park industry:


Chatper 11 Bankruptcy: (Debt Restructuring)

The company goes through debt restructuring with court assistance; they do whatever they can to do a major overhaul on the company's financial situation. Most companies, I believe, are still able to run full operations during this time of debt restructuring, unless other complications have arisen or will come about. This can actually be a good thing for many companies - there have been instances where many companies have arisen out of Chapter 11 FAR stronger and have prospered (although as I will be a Civil/Mechanical Engineer, not an Economist, I do not know the specifics) after this has been dealt with.


Chapter 7 Bankruptcy: (Liquidation)

This is the one you have to look out for. If a company files for Chapter 7 bankruptcy, that means that they are no longer able to run their business, and they close down... whatever is left is up for grabs.


Thankfully, Six Flags filed for Chapter 11, which should actually be a VERY good thing for them. Throughout this, expect to see a huge chunk (or all) of their debt removed. As I said before, I will go to college for Mechanical and Civil Engineering, so I don't know how all this fancy law and economics works, but that should sum it up pretty well. If this does not answer your question, maybe someone who is even more educated in this will reply to this thread.

So all in all, Six Flags is still in business. They are just doing a massive court assisted debt overhaul. I am to say that NO ONE should worry. The only time we should worry is when we see "Six Flags" and "Chapter 7" in the same sentence of a news article headline... only then will they be screwed.

Even if it was in 7 I would think SFGADV would be in good shape. I wouldn't care if the park was not named with the Six Flags tag. I would have only worried about SFOT and SFOG but those are owned by owner groups with Six Flags managing. Those parks would be protected and isolated I believe. I bet they would operate as Six Flags still in the future in those cases. I care about the original park's (SFOT) history being preserved. They would continue to operate like the last Howard Johnson restaurants that were independent franchises.

Chapter 11 is okay.

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Thrillnetwork Moderator - Sophomore Original sn: CHILLERLC1
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You knew I wanted the other repeat too

The easiest way to understand it IMO is that Chapter 11 isn't bankruptcy, but rather it's full title of bankruptcy PROTECTION. What Chapter 11 allows a business to do is run as normal while the courts help them sort out their financial mess so that they may emerge a stronger company in the future. Occasionally that does not work and it falls to Chapter 7, which is a true bankruptcy, and leads to liquidation. See: Circuit City.

In Six Flags case, I personally see no real threat of Ch. 7. The reason they owe the PIERS (Preferred Stock) dividend in the first place, which pushed them into the Ch. 11, is because last year they made a profit for the first time in the company's history. If you followed the story for the last year, you'd also see that Six Flags in fact did so well last year that 11 of the 12 investors that held those PIERS agreed to a debt-for-equity swap. That is a big deal because it takes those lenders that simply collect money in a safe manner and makes them investors, which then has they assuming a risk based on the performance of the company. Unfortunately investor #12 wouldn't budge, so the other 11 lost their chance at that swap that was organized out-of-court. The chain never really had a chance with them, seeing as they wouldn't return calls, or meet face-to-face with Shapiro.

In the end, the NEW Six Flags that is saddled with debt from the foolishness of the OLD Six Flags should come out of this a much healthier company. No matter what the economy is, you simply cannot support $2.4 Billion in debt. When you make a profit for the first time EVER, yet have to pay $175 Million in INTEREST, you just can't sustain that.

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It will be interesting to watch. Again, i just don't see how debt just disappears. It would seem if I was owed a billion dollars and was banking on that money to operate, but then couldn't get it, it may very well cause me to go bankrupt. I honestly am not up on all the creditors six flags has but I bet they owe that non budging 12th creditor a boatload and they want their money. I want six flags to emerge stonger too but hopefully the creditors will not be totally hung out to dry in the process. That wouldn't seem fair. I understand Chapter 7. You would sell it all and each one would get their part but it will be cool to see how this Chapter 11 goes.

If you have not seen it, here is a letter from Mark Shapiro. He makes a lot of good points and it is a very good letter.

Open Letter From Our CEO: Six Flags

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Long Live Six Flags as I have 2 parks left to get from the core empire: SFGAM and SFStL.

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Thrillnetwork Moderator - Sophomore Original sn: CHILLERLC1
2008 & 2009 TN Coaster Draft Champion
You knew I wanted the other repeat too

I've never been shy about being critical of Six Flags, but count me as one who's hoping they emerge stronger than ever.

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Those are the only two I've been to so I guess I'm starting with the core! That's cool. My goal is to get to Six Flags Over Georgia and Six Flags Kentucky Kingdom. The rest are way too far for me I think.

Mark Shapiro has been reaching out to the media/bloggers. I like the vibe.

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Thrillnetwork Moderator - Sophomore Original sn: CHILLERLC1
2008 & 2009 TN Coaster Draft Champion
You knew I wanted the other repeat too

^^Actually, I'd say the core would be SFOT and SFOG, being the first two parks going by the way you took it. I think Leo means that Six Flags is the core amusement park chain in the U.S.

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I also hope SFI can comes out of this strong. I have never been a huge fan on SFI. But I'm even less of a fan on loosing most of the US parks to Foreign ownership which woudl be the case if the chain did get liquidated. But I don't think when all is said and done that all the parks will still be in the chain. A recent news report said that there is no support base for the bankruptcy and they may be short 50 million at the end of the year. I would guess they plan to sell properties to get that 50 million if not more. SFNO and SFKK are the big one in my mind that would go since both parks have had offers placed on them.

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Michael C

I have been trying to read all the new articles and agree with Michael C. I will be surprised if it goes as quickly as Mr Shapiro expects. I honestly think it would be better to sell some parks off at a profit of course and be a smaller chain that is fiscally responsible with itself than to be a big chain getting deeper and deeper in debt. They could continue to grow as they became more and more profitable. I would love to see the financial statements of privately owned companies such as Herschend Family Entertainment or Holiday World or whatever others there are. I truly hope SF comes out of this ok. I bought some stock in Cedar Fair when it got down real low and they have alot of debt too. I am hoping they handle if better than SF and don't end up going bankrupt. It will be interesting to watch. I do think SF has improved, I have no big complaints as far as friendliness and cleanliness goes.

We posted the story on our site, which explains exactly what will be happening. So, if you read the story from start to finish, you'd see what it's all about. People have even commented on it. In a way, this is a duplicate thread.

Six Flags declares Chapter 11 bankruptcy « ThrillNetwork.com - Sit down. Log in. Hang on!

It pays attention to look at the news stories. If you don't see anything, you can even post it as a story within our guidelines.

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