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Q, FUN & SPECIAL MEETINGS, THE FUN CONTINUES

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What to make of the Cedar Fair Proxy response?

Significant details concerning CF's two proposed alternative measures for the Special Unitholders Meeting are not spelled out, such as:

  • Will a staggered Board exist in the future? If so, Unitholder attempts to reform the Board are stymied, and it could take three years to effect change sufficient to result in new direction.
  • Will Unitholders be able to nominate, and elect, Directors utilizing the proposed CF procedure for the next Annual Unitholders Meeting this summer? If not, CF simply will have stonewalled Unitholders and prevented significant changes in the Board of Directors for an additional year.
  • Will the practice of allowing a Director candidate to be elected with as little as one affirmative vote continue? If so, CF could simply block Unitholder candidates by restricting the ballot to "qualifying candidates."
  • Will Board of Director seats be contested elections where by the highest vote getter(s) gain the seat?
  • Will the Board define "qualified nominee" as, amongst other criteria, a candidate nominated by the board?
  • What qualifications and information about proposed nominees will CF demand?
  • Why is CF willing to make such a radical structural change? Did the actions of activist investors drive these changes?

These are the issues which came quickly to mind upon reading the Cedar Fair filing. The devil will be in the fleshed out details. Unitholders should proceed with caution to avoid getting painted into a corner by Kinzel and Company.

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...The following statements have been made to the press on behalf of Q Funding III, L.P. and Q4 Funding, L.P.:

"It's a very high hurdle."

It is "appalling" that board members aren't urging unitholders to support their own proposals. "Do they not think this is a good idea? Their silence is deafening."...

http://www.sec.gov/A...14a12033011.htm

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There, again, seems to be some discrepancy over how many units Q owns. CF is saying 10.2% while the Toledo Blade article is saying 18.1%. Does Mr. Raynor himself own units that make up the difference?

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According to this SEC filing:

http://www.sec.gov/A...rfair13da18.htm

at the time of that filing, Q Funding III,L.P., Q4 Funding, L.P., and Geoffrey Raynor combined held 18.1 percent of the outstanding units, of which the first two having a combined 11.6 percent of the outstanding units in Cedar Fair LP. How Cedar Fair got a figure of 10.2 percent, I have no idea....

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What to make of the Cedar Fair Proxy response?

Significant details concerning CF's two proposed alternative measures for the Special Unitholders Meeting are not spelled out, such as:

  • Will a staggered Board exist in the future? If so, Unitholder attempts to reform the Board are stymied, and it could take three years to effect change sufficient to result in new direction.
  • Will Unitholders be able to nominate, and elect, Directors utilizing the proposed CF procedure for the next Annual Unitholders Meeting this summer? If not, CF simply will have stonewalled Unitholders and prevented significant changes in the Board of Directors for an additional year.
  • Will the practice of allowing a Director candidate to be elected with as little as one affirmative vote continue? If so, CF could simply block Unitholder candidates by restricting the ballot to "qualifying candidates."
  • Will Board of Director seats be contested elections where by the highest vote getter(s) gain the seat?
  • Will the Board define "qualified nominee" as, amongst other criteria, a candidate nominated by the board?
  • What qualifications and information about proposed nominees will CF demand?
  • Why is CF willing to make such a radical structural change? Did the actions of activist investors drive these changes?

These are the issues which came quickly to mind upon reading the Cedar Fair filing. The devil will be in the fleshed out details. Unitholders should proceed with caution to avoid getting painted into a corner by Kinzel and Company.

Just remember Leland,

Q did not propose answers to those questions that you just asked. So be careful how much blame you place to Cedar Fair in not immediately laying out these procedures. Q gave NO direction either, you need to remember that!

And as for your first question, I personally feel that the insiders of the company have more information on the internal and external environment than us other stakeholders in the company. For that reason I think that roughly three years can be an appropriate amount of time to create a "new direction". In some cases management/BOD does have better answers than the stakeholders, and I think unit holders should be careful to undermine that or you may see the board of directors and upper management become a carousel with lots of inefficient turnover!

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...The following statements have been made to the press on behalf of Q Funding III, L.P. and Q4 Funding, L.P.:

"This is not our preferred path, but when we see this level of mismanagement, we're left with very little choice."

We are outspoken because we have lost faith in Cedar Fair's ability to make decisions that align with shareholder interests.

"Right now, we're three for three. With this last issue being so clear-cut, such a basic fundamental right of good corporate governance, we're confident that we'll get overwhelming support again."...

http://www.sec.gov/A...an14a040411.htm

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FUN, Q Agree On Process For Approving Board Nominations:

...If the Company does not revise its current proxy statement and proxy card to contain only the Board Proposals, Q Investments currently plans to urge unitholders to vote as recommended by the Company; that is, to vote against Q Investments' proposal and, in addition, to vote for the two proposals set forth by the Company....
http://www.sec.gov/A...rn14a040811.htm

And: http://toledoblade.c...-proposals.html

And:

Cedar Fair LP and its largest shareholder eased a strained relationship this week when they agreed on the subject of providing shareholders the right to nominate candidates for the company's board of directors. Even if the process is enacted, it will have a limited affect this year because only one board seat is to be filled.

In its proxy statement for a special shareholders meeting May 24, Cedar Fair has two ballot proposals for shareholders that would give the stockholders the right to nominate board candidates. Although the amusement park chain's largest investor, Q Investments, also has proposed a nomination process, it said Friday it wants to withdraw its plan and back Cedar Fair's proposals.

A spokesman for Q Investments, a pair of Texas hedge funds that own 18 percent of Cedar Fair stock, said it will withdraw its proposal if time permits so there's no confusion on upcoming proxy ballots....

http://toledoblade.c...ominations.html

FUN's own proposal came only after Q demanded a change in the nomination process and even had to file suit to force FUN to set a special meeting...

For those who think Q is only an insurgent who has no one's best interest at heart other than their own, I have questions. Why did Cedar Fair agree to this, then? Especially when this proposal would have apparently required (and still will) 80 percent approval of the unitholders?

Note that this is not the first time that FUN and Q have ended up settling differences when FUN was under no legal obligation so to do.

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I would think so...can you please delete it?

I have no idea how that happened...it was posted in the right thread, but didn't make it there...

Although Cedar Fair LP has been accused of being selective in its board nominees....

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^I am at least good at following clues. I saw your FUN birthday wish for selective and came over to this thread to see if he was somehow connected with it! :P

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FUN's preliminary proxy statement:

...THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION WITH RESPECT TO PROPOSAL 1 AND PROPOSAL 2. Please note that we believe that Q Funding III, L.P. and Q4 Funding, L.P. (together with Geoffrey Raynor, “Q Investments”) intend to solicit proxies for use at the Special Meeting to vote in favor of Proposal 1 and Proposal 2. You may receive proxy solicitation materials from Q Investments, including a proxy statement and a duplicate copy of the white proxy card....

http://www.sec.gov/A...12/dprer14a.htm

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Cedar Fair SHAREHOLDERS' MEETING TO CONSIDER NOMINATION PROPOSALS:

Cedar Fair LP will hold its special shareholder meeting at 9 a.m. May 24 at the Cedar Point Center at Bowling Green State University's Firelands College west of Huron, Ohio, to consider two proposals that would allow shareholders to nominate board directors....

Cedar Fair's largest investor, Q Investments of Texas, called for the special meeting last month to allow shareholders to decide on its proposal for the changes. But then Q Investments withdrew its proposal last week after Cedar Fair made a proposal that would accomplish the same objective.

http://toledoblade.c...-proposals.html

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Today's Q SEC filings:

...On April 21, 2011, the Reporting Persons sent the following letter to the Issuer's Board of Directors:

Dear Gentlemen:

As you well know, we have called for the resignation of all but two members of this board. We no longer have confidence in your ability to oversee this business. And we certainly have no confidence in your ability to pick the next CEO.

We submit that any well qualified CEO is not going to want to work for a board that sided with Mr. Kinzel in what we believe has now been found to be his spurious account of the events surrounding Jack Falfas' departure.

We have recently heard rumors that Mark Shapiro, the former CEO of Six Flags who took the company into bankruptcy, is being considered. This would be yet another disastrous decision. If true, it boggles the mind why you would consider the executive who oversaw the decline in earnings that brought the company into bankruptcy rather than someone like Jim Reid-Anderson, the outstanding new CEO of Six Flags, who has overseen the company during its Phoenix-like rebirth.

We therefore wish to make it clear once again that we will likely not support any CEO candidate you put forth without the direct involvement of your unitholders. And should your decision here be anything like so many of the bad decisions you have made over the past 18 months, then we will vigorously campaign for his or her removal as soon as possible.

Regards,

Q Funding III & Q4 Funding...

http://www.sec.gov/Archives/edgar/data/811532/000089742311000075/cedarfair13da20042111.htm

See also:

http://www.sec.gov/Archives/edgar/data/811532/000089742311000076/cf14a12042111.htm

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Shapiro? Really? Interesting decision unless they are looking for someone to skillfully navigate them through bankruptcy and then receive a large bonus for doing so...

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As I`ve said before, things are certainly interesting. If true, I am a bit surprised about the Shapiro thing and Q being opposed to it. Why not go after the former CEO of Six Flags that started to right the ship, prior to filing for bankruptcy? Yes, they did ultimately file for bankruptcy protection. But they had a crushing amount of debt from previous management. It sure seemed like Shapiro was able to turn things around at Six Flags, he just wasn`t able to handle the pre-existing issues from previous management.

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Q has expressed its admiration for Messrs Reid-Anderson and Weber of the current Six Flags management. Cedar Fair has made noises that it is unhappy with what it perceives as a plot by Q to merge SIX and FUN. Mr. Shapiro is no friend of current SIX management. To put it mildly.

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On the close of business Thursday, Q filed documents with the SEC, and you could read it here almost instantaneously (funny how that happens...eh?). Now Lance Hart at Screamscape weighs in:

...(4/23/11) In a very interesting news report, The Q has filed new documents claiming that they have no confidence in the Cedar Fair Board's ability to choose a new CEO. In fact, they go on to report that they've heard reports that the board has considered Mark Shapiro, former CEO of Six Flags, as a possible replacement for Kinzel when he retires. While I think Shapiro had an interesting vision for where he wanted to take Six Flags, bringing him on board to run Cedar Fair who is also in a debt sinkhole like Six Flags was, is just not the right thing to do.

http://www.screamsca...s.htm#CedarFair

Should anyone tell him about Gary Story? Or that Q files its documents with the SEC, not the Toledo Blade? Nah...it's more fun this way...

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So is Q basically saying they're not going to be happy with anything that Cedar Fair does and that they should just run the show? That's basically what I'm getting any time that I read anything from Q, other than shareholders should have a say.

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Q has a plan. That plan has not been totally revealed at this time. The Q companies (and Mr. Raynor) do not believe the company is being run in the best interests of ALL the unitholders, as opposed to just the Messrs Kinzel and their cronies. Whether or not Q actually cares a whit about the rest of the unitholders also remains to be seen, however, had Mr. K and his cronies had their way, everyone else would have had to sell out for what even one poster here thought was a grand price of $11.50 per unit....

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