Six Flags amends bankruptcy plan

WILMINGTON, Del., April 5 (Reuters) - Six Flags Inc SIXFQ.OB filed an amended plan of reorganization formalizing last month's agreement putting junior bondholders in control of the company when it emerges from bankruptcy.

The amended plan, filed on Thursday, represents the third time the company’s management has changed sides in the bankruptcy.

This time it dropped its support for a plan backed by bondholders led by Avenue Capital Group, known as SFO noteholders, in favor of a plan proposed by bondholders led by Stark Investments, known as SFI noteholders.

The company switched allegiance last month just as the second week of hearings on the Avenue Capital-backed plan was drawing to a close.

The newest plan proposes to use new debt and an equity investment by the Stark Investments-led bondholders to pay the claims of secured lenders and the Avenue Capital-led bondholders.

The company originally entered bankruptcy in the middle of last year backing a plan from secured lenders.

The newest plan leaves in place CEO Mark Shapiro and gives him the right to name another board member. However, he cannot name current Chairman Daniel Snyder without the approval of the new equity investors.

The plan also leaves in place Shapiro’s proposed salary and bonuses, which both groups of bondholders criticized before the company adopted their plans.

Shapiro will receive an annual salary of $1.3 million, unchanged from his prebankruptcy base pay. He can also collect other bonuses including up to $3 million for bringing the company out of Chapter 11.

The company also has proposed restricted stock and stock option incentives worth up to 15 percent of the company for management, up from the previous two plans that proposed setting aside 10 percent.

The company did not issue any restricted stock or stock option incentive awards for top executives in 2008, its last full year prior to bankruptcy, according to its annual report.

Steven Levine, an attorney with Brown Rudnick, which represents the official committee of unsecured creditors, said he expected the committee to support the general parameters of the amended plan.

A spokesman for Avenue Capital declined to comment.

The case is In re: Premier International Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-12019. (Reporting by Tom Hals; editing by Andre Grenon)