Bankruptcy An Option For Cash-strapped Six Flags

By KRISTEN A. LEE

NEW YORK (AP) — Shares of Six Flags Inc. touched a new all-time low Friday after the theme park operator said it could not meet a looming financing obligation and may have to file for bankruptcy protection.

As the shares dropped, Moody's Investors Service cut the company's corporate family rating and probability-of-default rating by two notches to "Ca" — the second lowest — saying an out-of-court restructuring or a bankruptcy filing "is likely in the near term."

The New York-based company, in which Microsoft Corp. co-founder Bill Gates' personal investment fund holds a stake of more than 10 percent, said Wednesday in its annual report that a Chapter 11 filing is possible if it doesn't reach a deal to restructure its debt. Chapter 11 bankruptcy frees a company from the threat of creditors' lawsuits while it reorganizes its finances.

Six Flags shares, which have traded under $1 since September, dropped 5 cents, or 26 percent, to 14 cents in afternoon trading. The stock has traded between 16 cents and $2.50 during the past 52 weeks.

In its fourth-quarter earnings report on Tuesday, Six Flags said it does not expect to have enough cash to pay off its preferred income redeemable shares, or PIERS, when they mature on Aug. 15 and a total of more than $300 million will be due.