Kentucky sues Six Flags for rides at Kentucky Kingdom site

This should be easy. Someone should have copies of the purchase orders for the rides, either Ed Hart's investment group, Premier/Six Flags, or the State Fair. Let's see if the State Fair Board is able to produce any receipts.

This is a lot more in depth, than lessor/lessee he said/she said. Six Flags tried to negotiate their way out of a lease they signed. They still owe KSFB at least 2 million for the remainder of the lease. Six Flags wanted a lease that said they did not have to pay a lease, unless the park showed a profit, at witch point KSFB would get some of the profit. That is not a deal or a lease, that would be a freebie, since Six Flags has no intention on ever showing a profit there, so they can keep all the money. Any profit that could be made, would easily be dissolved into the books, rides, investments, etc. This was a mess from the start. the KSFB owned the land, and Six Flags bought the rides. So, who really owns what? From the looks of things, Six Flags as a corporation under bankruptcy is trying to get out of making payments and sticking with deals they have made. Judges usually determine that the company has to pay it back over time.Nobody is ever allowed out, free and clear from any debt they have. I can see this one being settled quickly. The judge will probably determine how much Six Flags owes KSFB, and make them leave rides, games, etc equal to the amount owed, which means KSFB gets to keep most of their rides, and can find a new operator, at least in time for a partial season.I think Six Flags needs to give up, and move on. Since they already pulled the wool over their eyes with the removal of Chang, I think SF thought they could do it again. It wouldn't surprise me if this closing idea had been in the works for several years. This isn't the only time we have watched SF close a park. Astroworld, no repair to SFNO after Katrina,etc. SF seems to be circling the drain at high speed. I'd say, its only a matter of time before they are gone for good.

Why would SF/Premier spend millions of dollars on rides and whatnot, if they didn't own them? If they sign a purchase agreement with B&M, Zamperla, Vekoma, whoever, then they own that piece of equipment. I find it hard to believe that any company that rents/leases land or buildings would be stupid enough to invest millions of dollars in equipment if they can't take it with them when the lease is up. That's just throwing money away.

If I'm renting an apartment/house, I'm not going to put any money into it if I'm not going to get anything out of it. Sure I'll maintain what was originally there, keep it clean, etc. but I'm not going to go out and add a deck/patio/hot tub/pool whatever, if I can't take it with me when I leave.

But you're not renting said house with the expectation of producing revenue. The rides were purchased with the knowledge that they would make money. The fair board may be considering these rides as (semi)permanent fixtures. Doesn't matter who purchased them, nor does it matter who paid the taxes.

Most business leases, mine included, preclude the company from removing such fixtures without replacing them with equal or more valued fixtures. For a simple example, I purchased a new alarm system, easy to remove if needed. However, my lease prevents me from removing it as it has become a semi-permanent fixture.

No different than the lease that the big box store I used to be operations manager for had with their landlord.

And just because someone pays property taxes doesn't mean they own anything. My parents are renting a house to a tenant who agreed to pay all property taxes but she surley doesn't own the house.

Speaking of my parents, they live on leased land and while they can tear down any perm. structure there if they opt ou of the lease they can't take any with them. It really all boils down to the terms stated ina contract and whether or not the Judge finds all of said terms legally binding or not.

Like Lori said, most of us aren't going to add someting to a lease if we are under said contract, but as a business SFI was trying to add attractions to make money. As for Chang, looks like it was on their land and not the leased land. As far as other removed rides like the boomer, do we know that they didn't get permission to move it? Or perhaps as has been suggested, they could remove if they were replacing with equal or greater value.

fyrfyter, comparing this to the New Orleans and Astroworld closures is ridiculous and is neither here, nor there. These are all completely isolated incidences.

As a business, it made absolutely no sense on Six Flags' end to fix the New Orleans park. A brunt majority of the entire metro area had lost a large percentage of its population to Hurricane and flood damage. The people in that remained in that area were not going to spend money on leisure activites such as amusement parks when they've lost their homes and businesses.

As for Astroworld's closure, they cited poor park performance and shared parking issues with the neighboring sports stadium. Most importantly, this closure was performed by Kieran Burke, who was actually removed from his position after a hostile takeover by shareholder Dan Snyder. So Astroworld's demise was at the hand of completely different management.

Oddly enough, at many places we've rented in the past, I've added things that I couldn't take with me - lights, fans, shelving in the garage, paint - things like that. One place we even had carpeted, but the landlord let us subtract that from the rent so I'm not sure it counts.

Just figured I'd share since the subject came up. Weird Gonch fact #472.

I looked up ground leases and see that they can go either way. Depending on how it was written, on termination or expiration of the lease, all improvements become property of the lessor, in this case the Fair Board, or the property must be cleared by the lessee and returned to its original state. In which case Six Flags is required to remove everything.

Apparently it will depend on how that land lease was originally written, and then whether or not rides are considered permanent fixtures and leasehold improvements.

Fyrfyter, where did you come up with a $2 million dollar figure? The land was leased for $1.2 million per year. The articles I read did not indicate that SF was behind in their payments, only that they did not intend to pay for this year's leases which the Fair Board was expecting. Due to the Bankruptcy they were able to legally terminate those leases (there is more than one). Therefore they do not owe any money to the Fair Board. If the lease was not legally terminated they would owe much more than $2 million as the original leases expire in 2021 and 2049.

Lord Gonchar said:
Oddly enough, at many places we've rented in the past, I've added things that I couldn't take with me - lights, fans, shelving in the garage, paint - things like that. One place we even had carpeted, but the landlord let us subtract that from the rent so I'm not sure it counts.

We rented out a one-time daycare center here in Gainesville, and made MANY upgrades/enhancements to the property. The agreement (which I'm imagining as "standard") was that any previously-approved changes were deducted from the next month's rent...in the case of the HVAC replacement it ran over a few months' time.

"Improvements" could mean those upgrades to the property itself (plumbing, electrical, etc. - those things which are not removable). I would find it hard to believe that the Fair Board honestly believes that any rides purcahsed by, and for, SF would suddenly become theirs at the rightful termination of the lease. The fact that the Board said nothing at the removal of Chang only serves to further SF's argument.

Of course, let's assume for one minute that this ends up in court in the Louisville area... ;)

fyrfyter said:
Since they already pulled the wool over their eyes with the removal of Chang, I think SF thought they could do it again.

Yeah, I heard Shapiro snuck it out under his shirt....

Is that a B&M stand-up in your pocket or are you just happy to see me? ;)

rollergator said:
"Improvements" could mean those upgrades to the property itself (plumbing, electrical, etc. - those things which are not removable). I would find it hard to believe that the Fair Board honestly believes that any rides purcahsed by, and for, SF would suddenly become theirs at the rightful termination of the lease. The fact that the Board said nothing at the removal of Chang only serves to further SF's argument.

Well Six Flags may have made a deal to replace Chang with the Water Park Expansion and if that is in writing than it only helps the board...

I think Jeff makes an excellent point. It's almost certain during the Lassiter proceedings, the plaintiff's attorneys did extensive research into ownership of the rides. I would think if anything had been found that would show the State Fair board owned the drop tower, they would have been named as a co-defendant. Since that didn't happen, it appears they weren't owners of that ride, and probably not of any others.

...And the Fair Board should have thought about that before Six Flags packed up and left. They wouldn't consider Six Flags offer, so now they have nothing.

We will just have to wait and see....

Ken Jones said:

rollergator said:
"Improvements" could mean those upgrades to the property itself (plumbing, electrical, etc. - those things which are not removable). I would find it hard to believe that the Fair Board honestly believes that any rides purcahsed by, and for, SF would suddenly become theirs at the rightful termination of the lease. The fact that the Board said nothing at the removal of Chang only serves to further SF's argument.

Well Six Flags may have made a deal to replace Chang with the Water Park Expansion and if that is in writing than it only helps the board...

Exactly. That's what I was thinking, as well...

Jeffrey Seifert said:
Fyrfyter, where did you come up with a $2 million dollar figure? The land was leased for $1.2 million per year. The articles I read did not indicate that SF was behind in their payments, only that they did not intend to pay for this year's leases which the Fair Board was expecting. Due to the Bankruptcy they were able to legally terminate those leases (there is more than one). Therefore they do not owe any money to the Fair Board. If the lease was not legally terminated they would owe much more than $2 million as the original leases expire in 2021 and 2049.

You can't read one article. As we all know, the news will bend the truth so it comes out the way they want it to. You have to read multiple articles, to find out what the real truth is. Somewhere, there is an article, stating that they still had a valid lease, they had not been released from, and that they still owed KSFB 2 million on that lease. I am sure in addition to the 1.2 million you list, there is also some kind of termination clause in there. Companies don't get let out of leases for free, it isn't the way business is done. It always costs something. In this case, it looks like it is going to cost in rides.

You don't just get out of a lease, or past debt, you end up with bad debt. This still has to be repaid. Bankruptcy anymore, is just a restart, where you still have to pay off debt you have acquired. Look at the Freestyle mess, there is still debt there from when it was Hard Rock Park. SF is going to end up with the same style debt from their bankruptcy filings. It is the way things go.

For anyone who is interested, here are both lawsuits as filed. They are both interesting reads, including the part about KSFB going after SF for the removal of Chang, and not following through with said improvements.

SF - http://online.wsj.com/public/resources/documents/kkicomplaint.pdf

KSFB - http://online.wsj.com/public/resources/documents/premiercomplaint.pdf

I did say articles, as in plural. I've read pretty much everything I could find, however, I haven't found anything that mentions $2 million still owed either as unpaid debt or a termination clause.

If anyone has seen such an article would you be kind enough to provide a little more information than "somewhere"--like maybe a link?

If you think that an outstanding bill means you're going to get paid, you're living in a fantasy world. You know how much I got from CCI when they declared bankruptcy and owed me cash for hosting their Web site? $0 dollars. You know how much money banks are getting for foreclosures? Pennies on the dollar.