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Six Flags Noteholders Offer Competing Bankruptcy Plan


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Mr. Lance Hart of Screamscape is busy telling one and sundry that investments in the parks will be delayed until after the bankruptcy has been completed. I do not necessarily agree with this. Courts realize that debtors in possession must continue business if there is any prospect of the creditors to be paid.

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On that you would assume correctly. It all depends on the particular orders entered in the case, and, to some extent, the degree of opposition expressed during the matter. Management did not help itself make a case for its continued role as such by granting itself the bonuses and incentives it did before the bankruptcy filing. Whether or not that will be enough to derail management's proposed reorganization plan remains to be seen.

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Noteholders' bankruptcy plans opens fight for Six Flags:

..."The debtors' management team and board of directors are racing ahead with a plan that enriches themselves at the expense of virtually every other creditor constituency," said the proposal from the noteholders, which was filed on Monday. The noteholders criticized the management plan's provision to pay up to $30 million to senior executives if their proposal is confirmed.

Credit analysts have noted that the management proposal faced a difficult confirmation because of the treatment of unsecured creditors, which were offered far lower recoveries than had been proposed in talks leading up to the bankruptcy....

http://www.reuters.com/article/bankruptcyN...157409020090916

http://www.financierworldwide.com/article.php?id=5010

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  • 2 weeks later...
An investor in redeemable shares of bankrupt theme park operator Six Flags said in a court filing on Thursday that it has a competing plan of reorganization that will pay all creditors in full.

Resilient Capital Management LLC said its plan will reasonably trim expenses while maintaining cash flow, which would help lead to a full recovery for all debtholders, including the securities Resilient owns.

By contrast, the company has proposed transferring almost all of the equity to senior lenders.

"Debtors' management team has failed to manage debtors' capital effectively which has led debtors into this bankruptcy proceeding. Even in this proceeding, the proposed amended plan is not well thought out and is an attempt by management to enrich itself and senior creditors a the expense of PIERS and common equity," said the filing....

http://www.reuters.com/article/bankruptcyN...129733420091002

See also:

...Resilient and Six Flags noteholders have asked U.S. Bankruptcy Court Christopher Sontchi to end management's exclusive right to reorganize the company without facing rival plans. The two groups can't proceed without Sontchi's approval....

http://www.bloomberg.com/apps/news?pid=206...id=ay6nVhSKoQOI

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