Resilient wants Six Flags trustee to oversee bankruptcy

Resilient Capital Management LLC, a holder of mandatorily redeemable preferred stock in Six Flags Inc., will urge the Delaware bankruptcy judge at a Feb. 19 hearing to appoint a Chapter 11 trustee for the theme-park operator.

With a contested plan confirmation hearing scheduled to begin March 8 and continue through March 19, Resilient contends Six Flags executives are putting their own interests ahead of creditors. As evidence of the abdication of responsibilities to creditors, Resilient argues that managers are "poised to collect a bankruptcy jackpot and success fee in excess of $100 million for landing the debtors in bankruptcy and then bringing them out."

Resilient contends in papers filed Feb. 11 that Six Flags executives failed to pursue avenues that would have averted bankruptcy "because doing so would have deprived the management team of its bankruptcy jackpot."

Resilient's request is being made in opposition to Six Flags' motion for an extension until April 2 of the exclusive right to propose a Chapter 11 plan. Resilient wants a trustee who would presumably craft a plan that wouldn't wipe out common or preferred shareholders. If the judge isn't inclined to have a trustee, Resilient says it would settle for an examiner to perform an investigation into how the company arrived at the plan now on the table.

Resilient had been attempting last year to gain permission from the judge to file a competing reorganization plan. For a discussion of Six Flags' plan and the proposed alternative, click here to see the Bloomberg daily bankruptcy report from Dec. 1.

The Six Flags Chapter 11 petition in June listed assets of $2.9 billion against debt totaling $3.4 billion, including an $850 million secured term loan and a $243 million revolving credit. New York-based Six Flags filed under Chapter 11 with 20 theme parks, including 18 in the U.S. (One of which is in Gurnee.) The parks have 800 rides, including 120 roller coasters.

The case is Premier International Holdings Inc., 09-12019, U.S. Bankruptcy Court, District of Delaware (Wilmington).