Apex Parks Group Files for Bankruptcy
While their 12 operating properties (10 family entertainment centers and 2 water parks) are all currently closed due to government guidelines surrounding COVID-19, Apex filed its Chapter 11 bankruptcy petition in U.S. Bankruptcy Court on Wednesday. According to Becky Yerzak of the Wall Street Journal, it is assumed that Apex will be acquired by a lender group led by Ceberus Capital Management LP.
The senior lenders for Apex are expected to serve as a “stalking horse” bidder in a court-supervised auction for all of the company’s assets. This means that they will provide a “baseline” bid against which a bankrupt company may seek better offers.
“The actions we are taking today will help better position the Company for the future and enable us to continue serving our guests, team members and other business partners in the years ahead,” said John Fitzgerald, Apex CEO on Wednesday. “Apex has faced a number of challenges in recent years, including increased industry competition and consolidation, extensive operational expenditures and the seasonal nature of the business. To address these challenges, we have implemented numerous operational initiatives to increase profitability; however, despite these efforts and the hard work of our team members, continuing market headwinds and operational challenges have prevented us from meaningfully improving financial performance. After an exhaustive examination of all options, we’ve determined that a sale of the Company through the Chapter 11 process is the best path forward to enable Apex to focus on future operational transformation and growth.”
The move to file for bankruptcy was to reduce debt and Apex expects to resume operations. When they reopen, Apex plans to honor gift cards and season passes, and pay their employees and suppliers. The company’s lenders will provide financing to support the business during restructuring.
According to the WSJ: The bankruptcy petition lists assets ranging from $50-100 million and liabilities between $100-500 million. Of the unsecured creditors, the largest are landlords and and professional services.
“We look forward to reopening the parks so that we can continue to provide exceptional and memorable guest experiences for our communities,” Fitzgerald added. “I also want to extend our deepest gratitude to our team members. We recognize this is a challenging time on numerous fronts and look forward to us all returning to work.”