Six Flags: Buyout deal was rejected in 2007

City officials rejected a deal two years ago that would have paid New Orleans more than $14 million to allow Six Flags Inc. to walk away from its hurricane-shuttered theme park, the company's chief executive said Thursday. City officials said Wednesday that a lawsuit against Six Flags was planned, citing an impasse with the New York-based company over reopening the park in eastern New Orleans.

But Six Flags Chief Executive Mark Shapiro told The Associated Press on Thursday that his company - which is now trying to avoid filing for Chapter 11 bankruptcy - offered in 2007 to pay its lease with the city, in full, upfront, waive all claims to city-owned land used by the park and give the city 86 acres that Six Flags owns.

"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," Shapiro said.

Shapiro, who met with Mayor Ray Nagin and other officials Wednesday, said the company has no intention of reopening the park "and we've been clear on that for the past year."

"We are completely current on our payments to the city as specified in our lease. And we have maintained the property at the required levels," Shapiro said. "It's been our intent for almost two years to work out a walkaway agreement that works for both parties. And we believe we are still on that track."

But facing its own financial problems, Six Flags is unable to match the 2007 offer, Shapiro said.

A call seeking comment was placed to Nagin's press office.

On Wednesday, City Attorney Penya Moses-Fields said the city had informed Six Flags of its intent to sue. She called the lack of any plans to reopen the site, closed since Hurricane Katrina hit in August 2005, "totally unacceptable" though lease payments were still being made. Moses-Fields said the park was supposed to be stimulating the local economy and providing jobs.

Shapiro said the lease - at $1.4 million a year - runs until an option date in 2017.

Six Flags, which operates 20 theme parks in North America, opened the New Orleans park in 2003 after buying what had been known as the Jazzland Theme Park from bankruptcy and signing a long-term lease with the city to operate it. Jazzland opened in 2000.

Now, Six Flags itself has said it might have to seek bankruptcy protection to reorganize its debt.

Last week, the company announced a debt restructuring plan including an offer to trade new common shares for three series of senior notes. Six Flags also said it is asking holders of its outstanding notes to remove or change terms of its debt, including the conditions that mean it is in default.

The holders of Six Flags' preferred income redeemable shares, or PIERS, will be due more than $300 million when the shares mature on Aug. 15. Six Flags has said it does not expect to have enough cash to meet that obligation.

On Monday, Six Flags' common shares and PIERS were removed from the New York Stock Exchange and moved to the OTC Bulletin Board.