Six Flags Inc. has revamped its Chapter 11 bankruptcy reorganization plan in an effort to gain broader support from its creditors, according to a disclosure statement filed with the amusement park company's second amended joint plan of reorganization last week in U.S. Bankruptcy Court for the District of Delaware.

The reorganization initially was filed in June on behalf of 37 Six Flags entities. (The three Georgia properties in the Six Flags family—Six Flags Over Georgia, Six Flags Whitewater and American Adventures, are not listed among properties that are part of the reorganization.)

The Six Flags entities sought to restructure more than $2.7 billion in debt and preferred equity obligations racked up between 1998 and 2005. Those occurred under a prior management team that made large capital expenditures on new attractions and purchased additional theme parks right before the economic downturn reduced consumer spending, particularly on discretionary activities such as entertainment.

Six Flags, based in New York, is represented by attorneys from, primarily, the New York and Chicago offices of Paul, Hastings, Janofsky & Walker and the Wilmington, Del.-based Richards, Layton & Finger.

The company noted in its disclosure that the terms of its prior reorganization plan were affected by the poor economy, the limited availability of credit and “the unwillingness of some debt holders to negotiate a consensual plan with the debtors on terms that permitted a successful reorganization.”

Now, despite a challenging amusement park season hampered by bad weather in the Northeast, swine flu fears and continued consumer reluctance to spend money on discretionary entertainment, the credit markets have begun to stabilize, according to the disclosure, which added that those markets now offer financing opportunities that weren't available when the plan first was filed.

After “extensive discussions with a wide variety of creditor constituencies,” Six Flags believes it has found an “ultimate plan that will secure broad support, if not be entirely consensual,” the disclosure says.

That plan involves the company's securing an additional $950 million in new debt financing. Of that, $800 million is a senior secured credit facility including a $650 million term loan and a $150 million revolving loan facility. According to the disclosure, the rest of the money will come from a $150 million multi-draw term loan facility from Time Warner, a pre-existing creditor and the former owner of the Six Flags entities. Time Warner sold the parks to Premier Parks Inc. in 1998.

This move will allow secured and some unsecured creditors to be paid at 100 percent, according to the disclosure; the payoff for note holders, depending upon their status and the entity to which they extended credit, will range from zero up to 47 percent of the debt.

Also under the new plan, the holders of some unsecured claims will be able to convert that debt to new common stock to be issued by the reorganized company, and those creditors also will have a limited right to purchase pro rata shares of up to $450 million in new common stock from a planned rights offering.

These aspects represent an improvement over the original plan, which would have paid most note holders less than 10 percent. Also under the original plan, pre-petition creditors' claims against Six Flags and some of its subsidiaries would have been converted to 92 percent of the common stock issued by the reorganized company and claims against another Six Flags entity would have been discharged and exchanged for a new guaranty.

The new plan is subject to approval by creditors; a voting date has not yet been set. An informal committee of creditors, a steering committee of pre-petition debt holders and Time Warner all have said they'll support the plan, according to the disclosure statement.

The case is In re: Premier International Holdings Inc., No. 09-12019. Premier International Holdings is a wholly owned subsidiary of Six Flags Theme Parks Inc., but Six Flags requested in court documents that Premier be the lead debtor in the case.