Six Flags, the theme-park owner chaired by Washington Redskins owner Daniel M. Snyder, got court permission Friday to finance its exit from bankruptcy using loans and a stock sale if it wins approval of its reorganization proposal.
U.S. Bankruptcy Judge Christopher Sontchi approved the proposed $800 million loan and a $450 million rights offering as well as the company’s disclosure statement. Six Flags can now send the restructuring plan to creditors for a vote. A hearing to consider approval of the plan is scheduled for March 8 through March 19.
Six Flags filed for bankruptcy protection in June with plans to cut debt by $1.8 billion. Under a plan drawn up by company managers, lenders owed $1.1 billion would be fully repaid and two noteholder groups would split about 30 percent of the stock in the reorganized company. Six Flags would raise $450 million by selling 70 percent of the stock.
On Wednesday, Sontchi rejected the first versions of the loan and the rights offering, siding with creditors who claimed that bank and breakup fees associated with the proposals were too high.
The same day as that ruling, Six Flags negotiated lower fees with the banks arranging the loan and with noteholders guaranteeing the new stock would be sold through the rights offering. The new breakup fee related to the offering is $11.25 million, down from $22.5 million.
On Friday, lawyers for creditors agreed that the reduced fees are "within the market." The creditors opposed the proposed payment schedule for the fees.
Sontchi wasn’t swayed by the creditors’ arguments, saying "in the context of this case" the company’s proposed fees and the financing "are reasonable."
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