Six flags filed for bankruptcy back in June 2008. The company was unable to pay its debt around $2.4 billion and around $300 million payments to preferred stockholders due in August (Forbes, 2009). Daniel Synder, the owned 6% of Six Flags, became the chairman in 2005 and hired a new management team, and sold off underperforming parks. Since he came the chairman, I reported losses of $558.8 million in two years. The reason why Six Flags field for bankruptcy is that Six Flags only make profits during the peek-season between April to September. However, they kept expending and building new parks across the country instead of focusing the old parks and rebuilding them. After emerging from Chapter 11 bankruptcy, they turned the company’s ownership over to bondholders (Hals, 2010). According to Hals, “The company exits bankruptcy as Six Flags Entertainment Corp and under the control of hedge funds such as Stark Investments, Pentwater Capital Management and Bay Harbour Management. The funds owned its bonds and invested $725 million to recapitalize the company.”
Six Flags continued to develop new rides in Texas, and Chicago which were great attractions for the thrill seekers. Keeping the relationship with Time Warner also helped Six Flags recover from bankruptcy; implementing the feature rides themed after Batman, Superman, and other DC Comic Characters (Katje, 2014). After change in the management, the attendance figures kept growing since 2009. The exact numbers provided from Katje were: 23.3 million (2009), 24.3 million (2010), 24.3 million (2011), 25.7 million (2012), and 26.1 million (2013).
Six Flags reported that they have been producing revenue increase for nine consecutive years (Six Flags, 2019). Six Flags now has 26 parks across the United States, Mexico, and Canada, entertaining millions of families with themed rides, water parks, and unique attractions. Six Flags is definitely doing better than ever, but COVID 19 could have a great impact on Six Flags.
Forbes. (2009, June 13). Six flags files for chap. 11 bankruptcy. https://www.forbes.com/2009/06/13/six-flags-bankruptcy-business-chapter-eleven.html
Hals, T. (2010, May 3). Six flags emerges from bankruptcy. U.S. https://www.reuters.com/article/us-sixflags/six-flags-emerges-from-bankruptcy-idUSTRE6422RF20100503
Six Flags. (2019, February 14). Record revenue for ninth consecutive year at six flags. https://investors.sixflags.com/news-and-events/press-releases/2019/02-14-2019-105951697
For this discussion forum, you are to research a company that declared bankruptcy and then reorganized / came out of it stronger and for the better. Discuss what you think made your chosen entity go into bankruptcy, any significant measures it took during bankruptcy, and what happened to it once it came out of it.
There are several great examples of companies that have gone bankrupt and emerged stronger through reorganization. One great example is General Motors who declared bankruptcy in 2009. Prior to 2009 General Motors was riddled with conflict. The different divisions within the business were expected to fight for resources and left to deal with devastating financial constraints. Aside from internal issues, the Great Recession of 2007-2009 played a large part in the business becoming unprofitable. One of the largest steps that GM took during reorganizing was hiring a new management team. President Obama, that oversaw the bankruptcy reorganizing, let go the CEO of the company, Rick Wagoner. The newly installed management team includes Mary Barra, CEO, Dan Ammann, president, and Mark Reuss, vice president. Barra and Reuss have a long connection to the business, both have family members that worked for the company as well as started their own careers within the company. The three leaders are all very different and bring their own personality to the business but all three are dedicated to remaining cohesive and inventive. In order to create a better system, the company streamlined its internal finances that were utterly disorganized prior to 2009. The segments of the business were all closely evaluated in order to access gains and losses. The new team sold off subsidiaries and reduced the number of offerings in order to focus on where the business could continue to be profitable. In order to remain successful, the leaders of the company know they must remain vigilant. While there has been expansion in the auto industry for the last decade another recession of downturn is inevitable. The leaders have decided that their test is still yet to come but they often run through different scenarios in order to prepare for the future and potential difficulties (DeBord, 2018). When the company filed for bankruptcy in 2009, they held $82 billion in assets and $173 billion in liabilities (Bigman, 2013). Currently they are ranked 18th on Fortune 500 list and had $228 billion in assets (General Motors, n.d.).
Bigman, D. (2013, October 30). How General Motors Was Really Saved: The Untold True Story Of The Most Important Bankruptcy In U.S. History. Retrieved from Forbes: https://www.forbes.com/sites/danbigman/2013/10/30/how-general-motors-was-really-saved-the-untold-true-story-of-the-most-important-bankruptcy-in-u-s-history/?sh=5083032b7eea
DeBord, M. (2018, October 20). How GM went from a government bailout and bankruptcy to being one of the world’s best-run car companies a decade later. Retrieved from Business Insider: https://www.businessinsider.com/gm-mary-barra-management-helped-save-automaker-2018-10
General Motors. (n.d.). Retrieved from Fortune 500: https://fortune.com/company/general-motors/fortune500/
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