Six Flags Inc junior bondholders will own the bankrupt theme park operator under a settlement reached on March 19, ending a two-week long trial.
The deal was agreed in the US Bankruptcy Court in Wilmington, Delaware, after a trial related to the now-defunct reorganisation plan was halted so Six Flags and two competing groups of bondholders could negotiate.
According to the deal, junior bondholders will invest up to $725 million of new equity in the theme park operator. The deal also includes new debt of about $1.1 billion that will be used to pay off creditors and fund operations.
The settlement requires current management to remain in place. Junior bondholders, led by Stark Investments, will control the company. The deal also gives up to 15% of the company’s equity to management.
Senior noteholders led by Avenue Capital Group had been fighting for in court for their plan of reorganisation, which had the support of the company. Under their plan they would have taken control of the company, which operates 19 amusement parks and waterparks in North America.