Turns out the deadline for the PIERS payouts was last night, so promptly this morning Six Flags filed for chapter 11. The good news is Six Flags saw this coming for nearly a year now, and the restructuring plan is going to wipe nearly 2 billion from their debt load.
This will NOT effect the current operation of the parks, nothing is going to close anytime soon.
And for all those people backin 2005 who hated Dan Snyder, this is for you:
Six Flags' Chapter 11 filing marks a setback for investor Daniel Snyder, the Washington Redskins football team owner who took control of the theme-park company in a contentious proxy fight in 2005 and installed his own management team. The bankruptcy would likely wipe out Mr. Snyder's stake.
Discuss.
Top 5 wood-5-Goliath 4-Ravine Flyer II 3-Phoenix 2-Voyage 1-El Toro Top 5 Steel- 5-Velocicoaster 4- Maverick 3- Fury 325 2-Steel Vengeance 1-X2 Coaster Count: 444
The plan would result in a deleveraging of the Company’s balance sheet by approximately $1.8 billion, as well as the elimination of more than $300 million in mandatorily redeemable preferred stock obligations.
So there, that's is why they put off that payment. Why pay it? When you can just take investors money and call it a day
So, that's why they sent out the emails about don't worry about it because we aren't going under, or something like that.
I know they want people to keep on going to the parks, but saying that they won't sell your local park I don't necessary agree with. Maybe, they do want to sell some park to help with the financials. If they get a good deal, they get a good deal.
"I've been staring at the world, waiting. All the trouble and all the pain we're facing. Too much light to be livin' in the dark. Why waste time? We only got one life. Together we can be the CHANGE. So go and let your heart burn bright"
It seems like these "prepackaged", pre-nogotiated Bankruptcy Filings are getting to be the norm for businesses and corporations anymore.
I suppose we can always wonder whether Snyder's plan would have worked if the economy hadn't tanked. I still think the present management and their plans are better than the course the previous ones were on. Now that they're going to be much closer to debt-free they really have something to prove though. I hope they continue to operate in a somewhat fiscally responsible manner and don't go on a spending spree they can't afford.
diggerg56 wrote:It seems like these "prepackaged", pre-nogotiated Bankruptcy Filings are getting to be the norm for businesses and corporations anymore.
I suppose we can always wonder whether Snyder's plan would have worked if the economy hadn't tanked.
Most of me thinks this was inevitable. They have been sitting on over 2 billion in debt for nearly a decade, and it wasn't going away. Yeah, the credit market exploded this year, but even if it was still doing well Six Flags needed to pay their shareholders, and they couldn't keep getting loans forever.
Its a fine plan, big investors get screwed but thats the risk you take.
Top 5 wood-5-Goliath 4-Ravine Flyer II 3-Phoenix 2-Voyage 1-El Toro Top 5 Steel- 5-Velocicoaster 4- Maverick 3- Fury 325 2-Steel Vengeance 1-X2 Coaster Count: 444
This is not even a bad thing! I do think Shapiro's plan would have worked if the economy didn't, but its not like he could have paid off that $1.8 billion in debt in a few years! It is also excellent that they are laying EVERYTHING out on the table, explaining exactly what there gonna do when there done filing, how it will affect the employee's, the parks and so on! Yes, bankruptcy is a bad thing, but i feel shapiro is entering already know what he will do to emerge from it, and the fact that he is Cash Flow Positive already makes it all the better! Once this is done, he can work on making the parks even more profitable so that in the future, they do not have to rely on building on there debt just to add more rides!
There really was no other option so good for them. Looking forward to seeing that 1.8 billion go down down down very soon....not an easy thing to do and kind of frustrating but this way the company can move forward
The past few years theyve been operating on the virge of bankruptcy, and following their financials, as w00dland said, it was pretty clear this was inevitable bad economy or not.
The real loser here is Dan Snyder, he is out a LOT of money. The stock was around $12/share when he bought that huge stake in SF [OUCH] . Same goes for Bill Gates who owned even more of the company than Snyder.
Coaster Justin wrote:Hopefully this will make People know that NOBODY SHOULD INVEST IN STOCK. Put it in the Bank and Collect Interest Safely.
Really? So nobody should invest, therefore companies can not raise funds by going public. No funds = no business period. Going public is also a way for companies to increase their credit lines, so that also keeps them in business.
People take risk when then invest. As the saying goes, with great risk comes great reward. Anyone that invest in companies they like with no research deserves to loose it all. I can tell you from personal experiences that it is almost a full time job managing a small portfolio of stock, but is well worth.
Also, your money is not safe in the bank. If a major chain, such as Chase, were to go under and no company bought them, the FDIC have no where near enough money to cover all investments. When you consider small banks that go under normally have anywhere from 10-150 million in investments, add that up with a bank chain with 5000 locations. Hell, the last year alone they took over 55 billion in deposits, which cost the government nearly 17 billion.
Sorry. I just think of the Stock Market as ONE BIG CREDIT CARD. Not being on the Stock Market is like having a Debit Card. (You only spend what you have, you don't owe investors, your business doesn't get out of control.)
Coaster Justin wrote:Sorry. I just think of the Stock Market as ONE BIG CREDIT CARD. Not being on the Stock Market is like having a Debit Card. (You only spend what you have, you don't owe investors, your business doesn't get out of control.)
Credit is what runs the world. Companies MUST take on debt to grow. The start up cost of most small businesses runs well over 100k before opening day. Within one year, it is not unusual for it to cost 250k to get things going. So they market themselves to investors (non-stock market ones) to gain the capital. From there, once a profit is turned, the investors are paid back with interest or continue to own part of the company. If they fail, well, just look at Hard Rock Park.
Would it be nice to be debt free, sure. But 99% or business and people do not have that option. It is no different then not having the cash to buy a car or house upfront. Same for college as well or medical cost. The days of paying cash for everything left around 1970.
To put this in company perspective, share holders can also keep a company in line. Many, many revolts on companies have been lead by share holders. A key example of this is the revolt against the anti-GLBT policy Cracker Barrel had. The share holders alone voted to change the policy, not the management.
Sorry, I'm Wrong again. I'm just one of those People that hate THE BAD Credit Card Users that ruined about 50% of the American/ World Economy. The ones that are Mostly responsible for the Housing Market, The Car Companies, The Companies that sent Credit Cards to 15 Year Old Teens.
Coaster Justin wrote:Sorry, I'm Wrong again. I'm just one of those People that hate THE BAD Credit Card Users that ruined about 50% of the American/ World Economy. The ones that are Mostly responsible for the Housing Market, The Car Companies, The Companies that sent Credit Cards to 15 Year Old Teens.
Sorry, I was Wrong before and I'm Wrong Now.
I am with you 100% on hating bad credit users. What sucks is now how hard it is just to get your first credit card. Oh well, what can you do.
This is no surprise. Six Flags has been in trouble for a long time but they keep buying out places then wondering why they fail. It's funny. The only bad thing is that I'm sure the head people got their nice share of money before they filed chapter 11 (so they are set for life), while making themselves look like complete fools.
Coaster Justin wrote:Sorry, I'm Wrong again. I'm just one of those People that hate THE BAD Credit Card Users that ruined about 50% of the American/ World Economy. The ones that are Mostly responsible for the Housing Market, The Car Companies, The Companies that sent Credit Cards to 15 Year Old Teens.
Sorry, I was Wrong before and I'm Wrong Now.
No...I agree on this one, but while the blame mostly lies on the feds for dishing out this money to the people who couldn't ever possibly pay it back...these people knew darn well that they could never afford the payback yet got it anyhow.
As far as Six Flags, the employees have been telling people that they are planning for both 2010 and 2011 and are not going anywhere anytime soon. While I first thought this may play havoc on attendance, I don't think this is the case any longer.
kbrown wrote:This is no surprise. Six Flags has been in trouble for a long time but they keep buying out places then wondering why they fail. It's funny. The only bad thing is that I'm sure the head people got their nice share of money before they filed chapter 11 (so they are set for life), while making themselves look like complete fools.
That's fine to sy but remember Six Flags'mountain of debt was accumulated before the current corporate management team was in place. Snyder, Shapiro and others have personally lost a ton of $$ as the stock value plummeted.
At least they have a plan that seems to be working in terms of operation and generating positive cash flow. But, when you inherit nearly $2 Billion in debt it's a tough deal. Six Flags will be a better stronger company after the reorganization and I doubt the current regime will go crazy borrowing in the future.
^ Need anyone to help you with said punching? The relatives I've talked to this weekend told me the same story and told me the parks were closed. Then they proceeded to tell me I was wrong in saying they are open, despite living 15 minutes from a Six Flags park. I expect them to act that way if I was 13, not a 24 year old college graduate.
. Same goes for Bill Gates who owned even more of the company than Snyder.
