New York-based Six Flags is filing for Chapter 11 bankruptcy protection in a Delaware court, the company said in a statement.
The firm, which runs Six Flags Over Texas in Arlington among other amusement parks across the U.S., is planning to reorganize its financial structure, which management said is feeling the pressure of an inherited $2.4 billion debt.
In a letter to employees, Six Flags Chief Executive Officer and President Mark Shapiro said the companys debt left over from previous management led to the decision, despite the company making $275 million last year.
Shapiro said that it has been difficult for Six Flags to improve its balance sheet when owing approximately $175 million in interest expense on its debt and $100 million in park improvements to maintain and keep up the business.
Furthermore, the company has over $400 million of debt coming due within the next 12 months that cannot be refinanced in these financial markets.
Shapiro said the bankruptcy plan has the support of the companys lenders and the agent administering the companys $1.1 billion senior secured credit facility.
Today, we are moving to rectify our balance sheet once and for all, he said in the statement. This morning, Six Flags announced it is seeking expedited approval from the Bankruptcy Court for the District of Delaware of its pre-negotiated plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The plan has unanimous support of the lenders steering committee and the Administrative Agent for the firm's $1.1 billion senior secured credit facility. This support is proven by executed lock-up agreements.