The writing’s been on the wall for quite some time, but Six Flags finally filed for Chapter 11 Bankruptcy on Friday. The bankruptcy comes as $2.4 billion in debt is being carried on the park’s books. Current CEO Mark Shapiro explains that the bankruptcy is a measure that’s being taken due to the hole that the previous management put the company in. I don’t think that this is just spin as he took over a pretty troubled company back in 2006. They tried to turn things around by trimming the fat. In 2007, the company sold seven parks to PARC Management. Obviously, that wasn’t enough. Here’s the scoop on the bankruptcy according to Reuters:
The plan will result in a deleveraging of the company’s balance sheet by about $1.8 billion, as well as the elimination of more than $300 million in preferred stock obligations.
“The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets,” Mark Shapiro, the chief executive of Six Flags, said in a news release.
“As a result, we are cleaning up the past and positioning the company for future growth.”
Shapiro said the action will not affect day-to-day park operations. The bankruptcy filing “paves the way for a full revival of the company,” he said.
While bankrupcty carries a negative connotation, it actually helps companies a great deal. Also, it would appear that the company as whole is starting to turn things around. And most importantly, the ‘restructuring’ as they’re calling it on their corporate site, will have “…no impact on the day-to-day operations of our local parks.”
No park closings, no ticket price increases (actually prices are down this year), and the company is planning for their 50th Anniversary in 2011. Expect every Six Flags park to have something to boast that’s tied to the company’s anniversary. While I don’t know the inner workings of each Six Flags park or even one of them for that matter I would have to say that the new management just had a heck of a job on their hands in trying to right the ship. But now it looks like there’s hope on the horizon. So, while it’s easy for the parks to be a punching bag and they’re far from perfect, I would say that bankruptcy filing will be a good thing in the long run. Read Six Flags Official Restructuring (Bankruptcy) FAQ.
What’s Your Take?
What do you think about Six Flags declaring Chapter 11 Bankruptcy? How has your local Six Flags been recently compared to years ago? Leave a comment below.