Posted Sunday, August 23, 2009 2:22 PM | Contributed by Fun
Lenders would be given 92 percent of the new stock to be issued under the proposal and a $600 million new term loan in exchange for canceling about $1.13 billion in debt, Six Flags said in court papers filed in U.S. Bankruptcy Court.
Read more from Bloomberg.
According to this article, ( http://www.businessweek.com/ap/financialnews/D9A7HBBO2.htm ), Shapiro could get a $3 million emergence bonus, on top of his $1.3 million salary.
I think that's justified. Declaring bankruptcy with the mess he inherited was the right thing to do.
Indeed, and as we have discussed before, navigating a business through bankruptcy is a difficult task. He has done it pretty well it would seem. Under his leadership the organization is positioned to survive beyond the bankruptcy and that's something worthy of recognition.
A $3 million bonus for cancelling $1.13 billion in debt seems like a small price to pay.
seems about right. Especially since he didn't get the company into the mess, but he certainly seems to have been the one to steer it out of the mess.
Again, think of what would happen without such a guarantee in place. Senior management have no reason to stay around, or help in what is an amazingly difficult time. Trust me, those people put in some serious hours as the court has deadlines that aren't flexible, and there is a ton of stuff that has to happen, and that's just on the bankruptcy side. Don't forget how complex it must be to wrangle all the lawyers and bankers to agree on something. It's worse than watching sausage get made.
Would be nice to know that somehow the underlings who helped with all of that got a piece as well, but that bonus for that level of mgt is par for the course.
To me this just feels like good news. Six Flags has already turned things around and are rebounding nicely from some serious debt. Shapiro deserves the bonus.
I'm actually pretty excited about the future. Cedar Fair has been popping up steel hypers and other new rides everywhere. Once Six Flags gets their feet back on the ground, we could see some pretty awesome (but hopefully not reckless) expansion over the next 5 years.
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