NEW YORK, April 15 /PRNewswire/ -- Resilient Capital Management, a holder of Six Flags Preferred Income Equity Redeemable Shares ("PIERS") notifies all PIERS (OTC Bulletin Board: SIXOQ) and common shareholders of Six Flags (OTC Bulletin Board: SIXFQ) concerning its Motion to Participate in the Confirmation Hearing (Premier International Holdings Inc., et al., Case No. 09-12019, Docket Number 1989) scheduled for April 28, 2010 which it filed last night in the bankruptcy court in Delaware. The motion can be accessed at http://www.kccllc.net/documents/8812019/8812019100414000000000011.pdf.
In its motion Resilient highlights the valuation work performed on Six Flags by Amherst Capital Partners, L.L.C. - http://www.amherstpartners.com.
Amherst valued the company at a total enterprise value of $2,679,000,000. At this valuation the holders of the PIERS are entitled to approximately a 100% recovery or approximately $300 million. This compares to the current market capitalization of the PIERS of $2.75 million (SIXOQ closing price $0.25 per share - 11 million PIERS shares outstanding).
This contrasts sharply with the inaccurate valuation work performed on the company by Houlihan Lokey and Lazard Freres (NYSE: LAZ). These purported "experts" valued the company at approximately $1.5 billion only days before the SFI Bondholder group offered a deal which the market valued at between $2.3 and $2.5 billion.
The SFI Bondholders are poised to take over control of the company, having wrested control from the common shareholders by entering into a transaction which benefits management at the expense of the PIERS and common shareholders. According to Resilient's motion, "The valuation contest has been skewed such that it has been conducted within an artificial range defined by the parties with the resources to pay the costs of admission to the contest and by a management team with a more than $100 million vested interest in a particular outcome."
Lance Laifer, CEO of Resilient Capital Management said, "A cottage industry of lawyers is conspiring with management teams to take companies into bankruptcy and enrich management teams at the expense of the very shareholders they are supposed to be protecting and representing. This motion is about much more than just Six Flags. When a management team can take over a company, drive it into bankruptcy and then emerge with ten times more equity than it had prior to the bankruptcy filing, the system is seriously messed up and people - mostly individual investors - are losing massive amounts of money unnecessarily". Laifer continued, "We filed our motion at great expense, because we believe that real people are losing real money on the basis of faulty valuation reports. Resilient is committed to making sure we do our part to highlight and fix the problem that seemingly has developed in the Delaware bankruptcy court and corporate boardrooms throughout America."
Resilient's motion alleges a pattern of conduct by the SFI bondholders and the Six Flags management team, including the following:
- The SFI bondholders managed to raise over one billion dollars of consideration at approximately a $2.5 billion valuation even though it was battling management at the time it raised the capital.
- The lawyers and other professionals involved in this case are working off of a wrong valuation for the current deal on the table and that this incorrect and low valuation is being utilized to encourage the Honorable Judge Christopher S. Sontchi to confirm a plan of reorganization that is based upon an artificially low valuation that fails to address the points raised in the valuation performed on behalf of Resilient.
- Based on Amherst's valuation, management is poised to achieve a $150-200 million jackpot for steering the company into and out of bankruptcy and wiping out shareholders. It also points to under-explored and under-examined pockets of potentially substantial value, including Six Flags TV and the value likely to be realized from Six Flags' licensing business.
- The Debtor's management team is continuing to clearly violate its fiduciary responsibilities to the PIERS and common stockholders of Six Flags.
- During March at the confirmation hearing, management stressed that the company was off to a poor start in 2010, which contrasts with a recent NY Post article in which Mark Shapiro stated that, "we're having a terrific spring right now."
This motion supplements an earlier motion made by Resilient which calls for a Trustee to be appointed to replace management -http://www.kccllc.net/documents/8812019/8812019100211000000000004.pdf
Resilient is encouraging all shareholders of Six Flags to object to the Debtors' current plan of reorganization. Any such objections should be filed with the Delaware Bankruptcy Court at the following address:
Honorable Christopher S. Sontchi
United States Bankruptcy Court
District of Delaware
824 Market Street, 3rd Floor
Wilmington, DE 19801
Bankruptcy court in Delaware
To request more information or a copy of the Motion to Participate in the Confirmation Hearing scheduled for April 28, 2010 please contact Lance Laifer at firstname.lastname@example.org (Tel. 646-734-6657).
SOURCE Resilient Capital Management