Six Flags Theme Park Company Seeks Out Bankruptcy
Six Flags is the worlds largest theme park company and provides plenty of thrill rides. Now Six Flags is offering one to its creditors as it files for bankruptcy protection.
The economic devastation of 2008 is starting to rear its head in a big way. 2008 was the year Wall Street suffered. The fourth quarter of 2008 and first half of 2009 have been the time when the bill has come due for the rest of us. From massive job losses to a huge decrease in consumer spending, there are few winners and an absolute ton of losers.
The announcement that Six Flags is filing for Chapter 11 protection is hardly a surprise. Not many people are heading off to an amusement park these days. Most are more worried about paying the piper at the grocery store. Frivolous expenditures like theme parks just aren’t in the budget.
The surprise isn’t so much that Six Flags filed for bankruptcy, but that it filed for Chapter 11 protection. Chapter 11 is the reorganization form of bankruptcy. Given the current economic environment, one has to wonder how Six Flags plans on coming up with a viable plan for survival. The financial goals of the bankruptcy are certainly fascinating.
Six Flags comes into the bankruptcy filing owing a rather staggering 2.4 billion dollars to creditors. It intends to eliminate…wait for it…1.8 billion dollars of debt. Yes, it wants the court to just wipe away all that secured debt and let the company relaunch with mere $600 million in debt. Ah, the glories of bankruptcy!
The interesting thing is the court is most likely going to accept this plan or something close to it. Why? Well, the amusement park business is a “good times” business. When times are good economically, these places make money hand over foot. Times are definitely not good these days. So, how is Six Flags going to make money at its parks? The only way it slice and dice the debt it services. Otherwise, liquidation seems a far better option.