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WILMINGTON, Del., Nov 29 (Reuters) – A group of noteholders
of bankrupt regional theme park operator Six Flags Inc
(SIXFQ.OB) said on Sunday it submitted an alternative
reorganization plan that transfers most of the equity to them.

The group said their plan, submitted to Six Flags’ board of
directors on Nov. 25, was supported by noteholders owning more
than $500 million of the approximately $870 million in notes
issued by the company.

The new plan proposes that lenders and a senior class of
noteholders be paid in full, either with cash or reinstatement
of debt.

The noteholders who proposed the plan will receive up to 81
percent of the reorganized company’s stock. That compares with
the company’s current plan that proposes giving them less than
5 percent of the stock.

The noteholders proposed using a rights offering of $420
million to pay senior lenders and a senior class of
noteholders.

The proposal is the third alternative plan from investors
in Six Flags, the world’s largest operator of regional theme
parks.

Six Flags filed for bankruptcy in the middle of the year
with an original plan that transferred almost all of its stock
to senior lenders, including JPMorgan Chase & Co (JPM.N), in
return for cutting its debt.

The initial plan sparked immediate opposition, in part
because it was far more favorable to bank lenders than what the
company had proposed just prior to bankruptcy.

That prompted an alternative plan backed by hedge fund
Avenue Capital Management, which owned the senior class of
notes. Under the Avenue Capital proposal, which the company has
since adopted as its current plan, senior lenders will be paid
in full and most of the equity would go to the senior class of
noteholders.

The plan by the junior class of noteholders, led by hedge
fund Stark Investments, did not mention any recovery for equity
holders.

Investors in Six Flags preferred shares, known as PIERS,
have proposed a plan that will pay all creditors in full. That
plan, backed by Resilient Capital Management LLC, proposed
raising capital by issuing convertible securities.

Six Flags did not immediately return calls seeking
comment.

The noteholders who proposed the plan did not return calls
for comment.

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; additional reporting by Ritsuko Ando
in New York, editing by Matthew Lewis)
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