Six Flags has bowed to pressure from hedge fund Avenue Capital Management and backed down from a plan to would effectively hand the theme-park company over to its senior lenders.
The company filed for bankruptcy over the summer, proceeding to trot out its creepy old man mascot in an effort to drum up business. That reorganization plan would have given almost all of its stock to senior lenders, who would in turn forgive its debt.
But Avenue's Marc Lasry wasn't having any of it, since it would leave his firm and other unsecured creditors with practically nothing.
The new plan, which was filed with the court on Saturday, is based on proposals by the Avenue Capital group of bondholders and includes selling $450 million in new stock to increase the money available for creditors....
Holders of one class of unsecured bonds with claims of $420 million now stand to get up to 47.1 percent of the company under the new plan. Six Flags originally proposed giving them 7 percent.
Another class of unsecured bondholders with claims of $1.3 billion now stand to get as much as 4.8 percent of the company, compared to the original plan that offered 1 percent.
Six Flags credited the "stabilization and loosening" of the credit markets for the new bankruptcy plan.
Six Flags agrees to Avenue Capital bankruptcy plan [Reuters]