Lawsuit against Six Flags comes as amusement park giant faces major financial issues

CLEVELAND, Ohio — A federal lawsuit that alleges Six Flags misled investors about park conditions before its merger comes at a time when the amusement park giant faces major financial setbacks.

The lawsuit, filed in federal court last week, highlights the company’s ongoing struggles. The owner of Cedar Point is more than $5 billion in debt and is facing steep declines in attendance and revenue.

The document alleges that shortly after the merger became official, Six Flags reported a sharp rise in operating costs and disappointing earnings. The filing indicates that it was because of long-neglected maintenance and underinvestment at legacy parks.

In a report filed with the U.S. Securities and Exchange Commission last week, the company said preliminary attendance for the five-week period ending Nov. 2 showed 5.8 million people attended the parks, a drop of 11% compared to last year.

Earlier this year, Six Flags announced plans to sell its Maryland park, Six Flags America. The company is also looking to unload land near its Kings Dominion park outside Richmond, Virginia, and will shutter California’s Great America near San Francisco in 2027.

Since merging with Cedar Fair last year, Six Flags’ stock has plunged from more than $55 per share to $18 as of Monday. The lawsuit — filed by a municipal pension fund in Livonia, Michigan — claims investors who bought shares tied to the merger have lost hundreds of millions of dollars.

The July 2024 merger brought Cedar Point under the Six Flags umbrella and made Six Flags North America’s largest regional amusement park operator with 26 amusement parks, 15 separately gated water parks and nine resorts.

According to the filing, Six Flags had deferred basic infrastructure repairs and slashed staffing levels in the years leading up to the merger. These issues, the suit claims, were not disclosed to investors, who were instead told that the company had made “transformational investments” and was poised for growth.

The lawsuit names current and former executives, including Selim Bassoul and Richard Zimmerman, as defendants. Both men helped orchestrate the merger and have announced they will step down from their roles following the company’s poor financial performance.