WISCONSINREPORT.COM (06/13/2009) - Having a good year in 2008 wasn't enough to prevent a major company providing family recreation in three countries from filing bankruptcy. The amusement park company Six Flags is seeking Chapter 11 bankruptcy protection, saying it needs to reorganize to get rid of about 2 Billion Dollars in debt. The New York based company has a Six Flags amusement park at Gurnee, Illinois. However, Six Flags chief executive officer says the bankruptcy is not expected to affect Six Flags Great America nor any of its 19 other theme parks in the United States, Canada and Mexico.
Six Flags says it actually had a great year in 2008. It saw 25 million visitors and posted record revenues. But executives are trying to lighten a $2.4 billion debt load that they say is unsustainable. Saturday's bankruptcy filing came after earlier plan to negotiate an out-of-court deal with creditors failed.
The Six Flags Great America amusement park at Gurnee, Illinois has been frequently visited by families and young people through Wisconsin, Illinois, and the rest of the midwest for decades. Great America has also employed college students and others during peak parts of the year for the same length of time. Six Flags president and cheif operating officer Mark Shapiro says bankruptcy won't affect either from continuing.
"Every park is open and operating today and will continue with normal operations this summer and for years to come," Six Flags CEO Mark Shapiro said. "This restructuring process is strictly a “back of the house” effort to address and ensure the longstanding financial stability of Six Flags."
"The restructuring will have no impact on our local parks. Every park will see upgrades in 2009, including new rides and attractions, more and better-trained staff, longer park hours, expanded shopping and dining options, and performances by top musical acts—all at a great price for families watching their budgets," Shapiro explained.
Shapiro has pointed out that all Six Flag employees will continue to be paid in full and on time, and, that all benefits will continue. The company expects that there will be no reduction in the work force so that all of thousands of people who enjoy themselves at each Six Flags amusement park will continue to have that experience.
"Our suppliers and other partners will continue to be paid for their goods and services so our product and entertainment offerings will not suffer," Shapiro adds.
The company reportedly inherited an unsustainable $2.4 billion debt load from the previous management team.
"Even if you have a record year and make approximately 275 million dollars as we did last year, when you have to pay out approximately 175 million in interest expense on your debt" and thousands and thousands of dollars in park improvements "to maintain and keep up with the business, that's a balancing act you just can't risk year in and year out," Shapiro explained.
"Furthermore, we have over $400 million of debt coming due within the next 12 months that cannot be refinanced in these financial markets," Six Flags president and CEO Shapiro said.
This restructuring is expected to help the parent company eliminate debt and build for the future. The company says the bankruptcy will have no impact on the day-to-day operations of the local parks.
Six Flags the parks are profitable, but they have been burdened for too long with too much debt. The official feeling by the company is that reducing the debt and interest expenses will allow them to build on the substantial progress they've made over the past three years and realize the company's growth potential.
The company states: "We've had a busy spring, and our guests have given us top marks for customer satisfaction two years in a row. This means we can continue the massive upgrade program we started in 2006."
The public face of the company indicates they are hiring more staff, expanding hours, and improving service and attractions at all parks so they can five customers the best value in family entertainment.
Six Flags shares have traded below $1 since September. They closed at 26 cents on Friday, June 12, 2009.