Six Flags noteholder group objects to equity commitment expenses

By Caroline Salls

Pittsburgh, April 23 - Six Flags Inc.'s proposed equity commitment drew an objection from an informal committee of holders of Six Flags Operations, Inc.'s 12¼% unsecured notes due 2016, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

"As with their motion to enter into exit facility commitment letters, the debtors seek authority to incur millions of dollars of fees, expenses and indemnification obligations on an administrative expense basis that may very well prove to be unnecessary," the committee said in the objection.

Specifically, the noteholders said the company is looking to incur expenses incurred by backstop purchasers in connection with the equity commitment documents, a $16.3 million to $17.5 million break-up fee, a commitment fee of 0.526% of the new Six Flags common stock and "unquantifiable indemnification obligations."

The committee said it does not believe Six Flags' plan of reorganization is confirmable, and, because the equity commitment obligations are only necessary to the extent that the plan is confirmed, the court should only approve the commitment documents if the plan is confirmed and takes effect.

Six Flags, a regional theme park company based in New York, filed for bankruptcy on June 13, 2009. Its Chapter 11 case number is 09-12019.

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