Avenue Beats Back Stark’s Six Flags Disclosure Bid

Jan 11 2010 | 3:49am ET

Score another court victory for the Avenue Capital Group-led Six Flags secured creditors steering committee against a group of unsecured creditors, led by fellow hedge fund Stark Investments.

A Delaware bankruptcy court judge rejected a bid by Stark and its fellow junior noteholders to have Avenue disclose its holdings, ruling that the Avenue group does not have to reveal just how many Six Flags bonds they own.

“The law contemplates a subset of a larger group authorized by the larger group to act on its behalf,” Judge Christopher Sontchi ruled. “That is not the case here.”

“I don’t think ad hoc committees are subject” to the law in question, which requires disclosures by committees in a bankruptcy case, he said.

Avenue and its fellow committee members argued that any disclosure would unnecessarily reveal their trading strategies.

Six Flags said last week that it could emerge from bankruptcy as soon as March. Under its current reorganization plan, which requires court approval, Avenue would gain control of the theme park operator as part of an $830 million financing deal.


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