Shareholder Alert: Bernstein Litowitz Berger & Grossmann Announces the Filing of Amended Securities Class Action Complaint Against Six Flags Entertainment Corporation, Expanding the Class Period

NEW YORK, March 20, 2020 /PRNewswire/ -- Today, prominent investor rights law firm Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") filed an amended class action complaint for violations of the federal securities laws against Six Flags Entertainment Corporation ("Six Flags" or the "Company") and certain of the Company's former senior executives (collectively, "Defendants").  The amended complaint expands the class period that was asserted in the initial complaint that BLB&G filed in this action and is brought on behalf of investors in Six Flags common stock between April 25, 2018 and February 19, 2020, inclusive (the "Class Period"). 

The action, captioned Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Six Flags Entertainment Corporation, No. 4:20-cv-00201-P, is currently pending in the U.S. District Court for the Northern District of Texas.  A copy of the amended complaint is available on BLB&G's website by clicking here.   

Six Flags' Alleged Fraud

Six Flags is the world's largest regional theme park operator.  The claims alleged in this case arise from Defendants' misrepresentations and omissions relating to the Company's prospects of developing Six Flags-branded parks in China through licensing agreements with Chinese real estate developer, Riverside Investment Group Co. Ltd. ("Riverside"), and the financial problems at Riverside.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and growth prospects related to its agreements with Riverside to develop parks in China.  As development of those parks began to face delays, Defendants misled investors by downplaying the problems as "short-term" and "not material in the context of the long-term opportunity."  Defendants also assured investors that Riverside was "work[ing] through" the macroeconomic issues in China and that Riverside was in "great shape" financially.  In truth, Riverside was in severe financial distress and did not have the resources to timely complete its projects with Six Flags.  As a result of Defendants' misrepresentations, shares of Six Flags' common stock traded at artificially inflated prices throughout the Class Period. 

The truth emerged through a series of disclosures, beginning on February 14, 2019, when Six Flags announced a negative $15 million revenue adjustment for the fourth quarter of 2018 due to delays in the expected opening dates of some of its China parks, which the Company falsely blamed on macroeconomic issues in China.

On October 23, 2019, Six Flags again postponed the timing of its park openings in China, stating "it's unrealistic to think it's going to be exactly as we've outlined."

Then, on January 10, 2020, the Company disclosed that the development of its Six Flags-branded parks in China continued to encounter challenges and had not progressed as expected, placing the future of its China parks in jeopardy.  The Company also revealed that Riverside continued to face significant financial challenges, which caused Riverside to default on its payment obligations to Six Flags.

Finally, on February 20, 2020, Six Flags revealed that it terminated its development agreements with Riverside because the Chinese real estate developer had defaulted on its payment obligations to the Company during 2019.  As a result, the Company stated that it is unlikely that Six Flags would recognize any revenue or income from the development of its Six Flags-branded parks in China.  The Company also provided a dismal earnings outlook for 2020, driven by significantly lower revenue contribution from Six Flags' international development agreements, and announced the sudden departure of the Company's Chief Financial Officer, Defendant Marshall Barber.  As a result of these disclosures, the price of Six Flags common stock declined precipitously.

Pursuant to the notice published on February 12, 2020 in connection with BLB&G's filing of the initial complaint in this action, under the Private Securities Litigation Reform Act of 1995, investors wishing to serve as Lead Plaintiff for the Class must file a motion with the Court no later than April 13, 2020.  Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Michael D. Blatchley of BLB&G at 212-554-1281, or via e-mail at [email protected].

About BLB&G

BLB&G is widely recognized worldwide as a leading law firm advising institutional investors on issues related to corporate governance, shareholder rights, and securities litigation. Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity and pioneered the use of the litigation process to achieve precedent-setting governance reforms. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering over $33 billion on behalf of defrauded investors. More information about the firm can be found online at www.blbglaw.com.

Contact

Michael D. Blatchley
Bernstein Litowitz Berger & Grossmann LLP
1251 Avenue of the Americas, 44th Floor
New York, New York 10020
(212) 554-1281
[email protected] 

SOURCE Bernstein Litowitz Berger & Grossmann LLP

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