When Avenue Capital Management saw the proposed terms of theme park operator Six Flags Inc.’s reorganization, it was not happy. And when Avenue’s Marc Lasry isn’t happy, he doesn’t stay quiet.
Lasry pushed the company to do better by its unsecured bondholders, offering up its own plan. On Saturday, Six Flags more or less submitted the hedge fund’s proposal as its new plan to get out of bankruptcy protection.
Six Flags credited the “stabilization and loosening of the credit markets” for the change. The original plan would have awarded the company’s secured creditors just about all of its stock in exchange for debt forgiveness. The new deal is much more generous to unsecured bondholders, giving them the chance to own more than half of the reorganized company, and is to be financed with a $450 million stock sale.
Six Flags management would remain in place under the proposal.
Avenue did not get everything it wanted. The hedge fund sharply criticized some of the bonuses to be awarded to that management in the first plan. The bonuses stayed in the new plan.