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Noteholders' bankruptcy plan opens fight for Six Flags

WILMINGTON, Del., Sept 15 (Reuters) - Holders of Six Flags’ notes unveiled a bankruptcy plan that would turn the theme park operator over to them, rather than to secured lenders as managers have proposed, according to court documents.

Noteholders asked the judge handling the case to terminate management's right to exclusively propose a reorganization plan and allow them to present their plan, which includes a $450 million equity rights offering. Six Flags SIXFQ.OB filed for Chapter 11 bankruptcy protection in June.

The noteholders proposed paying secured lenders, which consists of JPMorgan Chase & Co JPM.N and a group of hedge funds, in full and splitting the equity among the noteholders.

In contrast, management’s plan proposed giving the secured lenders 92 percent of the reorganized company with the rest going to noteholders.

“The debtors’ management team and board of directors are racing ahead with a plan that enriches themselves at the expense of virtually every other creditor constituency,” said the proposal from the noteholders, which was filed on Monday.

The noteholders criticized the management plan’s provision to pay up to $30 million to senior executives if their proposal is confirmed.

Credit analysts have noted that the management proposal faced a difficult confirmation because of the treatment of unsecured creditors, which were offered far lower recoveries than had been proposed in talks leading up to the bankruptcy.

The company, the world’s largest operator of regional theme parks with revenue of more than $1 billion last year, has also attracted the attention of former managers, who in August said they could better run the company and increase its value.

The case is In re Premier International Holdings Inc. and Six Flags Inc., U.S. Bankruptcy Court, District of Delaware, No. 09-12019. (Reporting by Tom Hals; Editing by Muralikumar Anantharaman)

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