NOLA Plans To Sue Six Flags

[ThatTh*ngGirl]

LMAO.

Analysis: Playing business hardball backfires

Playing hardball in negotiations is a normal part of business, but the city of New Orleans' recent dealings with Six Flags Inc. indicate more practice is needed, judging by how badly the talks backfired.

Born of a 1990s push by city leaders to boost tourism as the key to the city's future prosperity, what began as Jazzland ended under the Six Flags ( SIX - news - people ) banner, pummeled by Hurricane Katrina. The park has not reopened since the August 2005 hurricane, and Six Flags has said it has no plans to do so.

To hear officials of the city and the giant theme park operator tell it, the city, about two years ago, rejected a Six Flags' offer from anywhere from $10 million to $14 million, along with free land to allow the company to get out from under its New Orleans park.

The park had never lived up to expectations from City Hall - starting with the administration of Mayor Marc Morial - that it would be a tourist magnet and provide a source of employment in a city stung by the 1980s oil bust as companies either closed or moved to Texas.

Born in 2000 as Jazzland, and funded partially by a $25 million federal loan, it took only about two years for the park to fall into bankruptcy court. Six Flags took over the city lease and rebranded the park as Six Flags New Orleans.

Then came Katrina in 2005 and the park was hit by heavy wind damage and floodwaters that stayed around for days. It stands among the ruins and rebuilding neighborhoods of eastern New Orleans, easily visible to travelers on Interstate 10.

Certainly, the city had a lot more on its mind than rebuilding a theme park, considering Katrina flooded 80 percent of New Orleans. But negotiations went on, and Six Flags, to rid itself of the problem, offered either $14 million - according to the company's count - or $10 million - according to the city attorney - along with all of the park land, plus giving the city 86 additional acres Six Flags owns. The city could have used the acreage for the redevelopment of its choice.

But Mayor Ray Nagin and company said no, demanding that Six Flags honor its 75-year lease - and rebuild the park.

Even by the time the first offer was floated in 2006, though, a cursory glance of the business pages would have shown Six Flags had other concerns besides New Orleans. In late 2005, carrying heavy debt and regular quarterly losses, the company was taken over by a group led by Washington Redskins owner Dan Rooney, which promptly ousted the top management that had brought Six Flags to New Orleans. The company trimmed its 30 theme parks back to 20.

The city wants 20 percent of Six Flags' flood insurance proceeds over $75 million. But asking any of thousands of homeowners in the region with water damage would have long ago confirmed that was an iffy proposition. Six Flags is still wrangling with its insurers in federal court.

By the time Nagin returned to New York last month to talk with Six Flags, the company already had warned Wall Street it was trying to avoid a bankruptcy reorganization, primarily because of holders of preferred shares due more than $300 million on Aug. 15.

"Now, the city is asking us to remake the same offer, but we're no longer in a position to be able to do that," said Six Flags chief executive Mark Shapiro, a day after he met with Nagin and read about the city's threat to file suit against his company.

Of Six Flags' current financial problems, "Their obligations to their shareholders are separate and apart to their obligations to us," said City Attorney Penya Moses-Fields.

If Six Flags does file for bankruptcy protection, a U.S. Bankruptcy Court judge will have broad powers to negate contracts - and even if Six Flags had paid up last month, the deal could have been voided by the judge, who has power to reject agreements reached just before a filing.

Maybe as Moses-Fields also said, the city doesn't have anything to lose by suing now - even if it's perhaps aimed at getting blood out of a turnip.

A few years ago, Six Flags closed the Astroworld park in Houston, which did little more than to stir sad nostalgia. Houston was too busy with other economic matters, such as sucking good-paying oil jobs from Louisiana while New Orleans leaders were preoccupied with growing low-wage tourism, including side shows such as Jazzland.

http://www.forbes.com/feeds/ap/2009/05/03/ap6370769.html

[ratdaddy]

as it is, i'm already far from a fan of new orleans, and really have no urge to go there if they reopen this park, my wife and her family have all said it was a joke compaired to astroworld, fiesta texas, and georgia. its in a bad area of the city, which means they had to find a hotel nearly 40 miles away, and the truth is, six flags probably does not want to have any business on the gulf coast, and i can promise they won't reopen that park, especially since they are on the verge of bankrupting

[astroworldfan_1]

You know SFOG isn't in the best neighborhood. Take one wrong turn out the parking lot and you better lock your doors..........
_________________

[Markieb]

[astroworldfan_1]

^ I've never been to BGT. So I don't have anything to say about it.
_________________