Copyright MassLive
The amusement park, known for its slogan “more flags more fun,” is caught in the middle of a class-action lawsuit after a recent merger left investors with questions and heightened tensions. A federal class-action lawsuit accuses Six Flags and its top executives of misleading investors about deteriorating park conditions before the company’s merger last year with Cedar Fair, a major amusement park operator. The Livonia, Michigan, municipal pension fund filed the lawsuit last week, claiming Six Flags concealed the poor state of its amusement parks while touting growth prospects to investors. After the July 2024 merger, the company reported a sharp rise in operating costs and disappointing earnings attributed to long-neglected maintenance and underinvestment at legacy parks, according to the complaint. The merger created the largest regional amusement park operator in North America and brought Cedar Point under the Six Flags brand. Read more: Amazon members may be entitled to part of historic $2.5B settlement: Here’s how The lawsuit claims the merger statement filed with the U.S. Securities and Exchange Commission was negligently prepared and presented an overly optimistic view of the deal’s benefits. While Six Flags deferred basic infrastructure repairs and cut staff, the company told investors it had made transformational investments and was positioned for growth, the complaint alleges. The lawsuit names executives Selim Bassoul and Richard Zimmerman as defendants. Both helped orchestrate the merger and have announced they will step down following the company’s poor financial performance. Read more: ‘A nightmare’: Why a solar company filed lawsuits against dozens of its Springfield customers Six Flags stock has plummeted from over $55 per share to as low as $16 on Monday. Investors claim they have suffered losses of hundreds of millions of dollars. The suit seeks class-action status and is pursuing compensatory damages and legal fees under the federal securities act. Six Flags has not filed a response to the complaint and did not immediately respond to a request for comment. More Business News Nationwide recall: 800K+ exercise bikes recalled after several injury reports Check your home for these products: 900K+ items sold on Amazon recalled in a week Paramount+ scraps free trials, hikes subscription costs starting early next year Lego-lovers say goodbye to hundreds of sets, company urges fans to buy before retirement Trendy Japanese ice cream, doughnut shop in Cambridge to close soon
