Six Flags' Great Bankruptcy Adventure

What goes up must come down. It's the law of gravity that sends Six Flags' roller coasters hurtling across its midways. The laws of economy, however, are sending the amusement park chain on a different kind of wild ride. Call it Six Flags Over Taxed. Saddled with over $2 billion of debt and unable to refinance a chunk of the debt that is coming due shortly, the company sought the protection of bankruptcy by filing for Chapter 11 yesterday. Six Flags stresses that the bankruptcy process is a planned reorganization that will not affect the day-to-day operations of the parks, and that all properties are open for business--and fun--as usual.

The tattered economy is partly to blame, but ironically the Six Flags parks have been performing well over the past few challenging years. When the current management team, including CEO Mark Shapiro, took over the chain in 2006, it inherited a $2-billion debt load from the previous free-spending honchos. In the three seasons they've been at the helm, Shapiro and company have, for the most part, done a respectable job cleaning up the parks, improving customer relations, and reversing course. In fact, in a recent financial report Six Flags announced that its total revenue, attendance, and per-capita spending were all up in 2008--which is especially notable, given that 2008 wasn't exactly a banner year for gas prices and the economy in general. And the buzz from new rides appears to be fueling decent turnstile clicks this season as well.

But Six Flags' massive debt has proved unshakeable. Creditors have simply been unwilling to restructure the debt amid the Great Recession, and the company was left with no option other than bankruptcy court. Details of the bankruptcy are not available, but according to a letter that Shapiro issued to employees, the chain will not reduce its workforce as a result of the pre-negotiated reorganization plan. That would seem to indicate that Six Flags is not planning to sell or close any of its properties.

• Find Six Flags Parks
• Six Flags Ride Guide 2009

Photo: Six Flags' Roller Coaster Economy ©Arthur Levine, 2006. Licensed to About.com.