Cedar Fair Corporate Development Discussion Thread (FUN)

[DJeXeL]

From the Toledo Blade:

 

SANDUSKY -- Stymied by Cedar Fair LP's corporate rules that do not allow its shareholders to nominate candidates for its board of directors, the amusement park chain's largest shareholder is once more calling for a special shareholders meeting to remedy the situation.

 

Q Investments, which is a pair of Texas-based hedge funds that controls 18.1 percent of Cedar Fair shares, yesterday filed documents with the Securities and Exchange Commission indicating it wants a special meeting for a vote on a proposal permitting shareholders to nominate board directors.

 

Just last month in Huron, Ohio, not far from the company's flagship Cedar Point amusement park, Cedar Fair held another special shareholders meeting at the request of Q Investments in order to vote on two other proposals put forth by the largest shareholder.

 

Regarding direct nomination of a board candidate, Cedar Fair has contended that the bylaws governing its limited partnership structure do not allow shareholders that right.

 

Instead, shareholders must submit names to the board which then decides which candidates it will place on an election ballot.

 

For several months, Q Investments has complained about Cedar Fair's position on the nominating issue, and last month officials of the Texas funds sent a letter to Cedar Fair management indicating they would demand a special shareholder meeting if the company did not abandon "its silly position."

 

The letter came only a week after the special shareholder meeting was held to vote on the two proposals: separating the board chairman and CEO roles that had been held by Dick Kinzel, and making the paying of dividends (also known as a distribution) a higher priority than repaying company debt.

 

The first proposal passed and late last month Mr. Kinzel relinquished his chairman role in favor of board member C. Thomas Harvie. Mr. Kinzel is remaining as CEO and president.

 

The second proposal on dividends was defeated narrowly. As a result, Cedar Fair said it would "review the distribution strategy" during the first quarter of this year as it reviews its 2010 earnings.

 

In its filing yesterday, Q Investments said in a statement that it "is unfortunate that we even have to pursue this path given the strong message that unitholders resoundingly sent to the Company's board of Directors and management team a short while ago …"

 

Cedar Fair, in a statement of its own, said, "We were again disappointed to see Q Funding choose to utilize SEC filings over face-to-face discussions for such an important issue. Our disappointment and frustration are compounded by the fact that our Board of Directors has again made multiple attempts to meet with Q Funding to no avail."

 

The company added that it will provide more information to shareholders on holding another special meeting once it receives a formal notice from Q Investments requesting the meeting.

Edited February 4, 2011 by jedimaster1227

[DJeXeL]

Turmoil at Cedar Fair is continuing with dueling lawsuits and new demands for a fresh board.

 

Q Investments, the activist hedge fund dogging the amusement park company's management, said Thursday seven board members should resign for misleading shareholders about the abrupt departure of a top executive in January.

 

Q Investments is pointing to a Feb. 28 ruling by an arbitration panel that Jacob "Jack" Falfas, the company's former chief operating officer, was wrongfully terminated, in violation of his employment agreement. Falfas said all along that he was fired, while Cedar Fair said he resigned.

 

Rest of article can be found at Cleveland.com

[KI Kidd]

And Cedar Fair's response to Q calling for their board members to resign:

 

Based on the actions of Mr. Falfas on June 12, 2010, the Company and its Board of Directors stand behind their conclusion and initial reporting to the Securities and Exchange Commission that Jack Falfas resigned from his position with Cedar Fair Entertainment Company.

 

Mr. Falfas has disputed the Company's position and chose to exercise his right to a confidential arbitration hearing pursuant to his contract with Cedar Fair. An arbitration panel recently ruled 2-to-1 in favor of Mr. Falfas. In no way did this initial decision conclude that the Company or its Board misled unitholders. The Company is convinced that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. The Company is seeking the Court's review of the arbitration award, as it is entitled to do. While the Company disagrees with the conclusions reached by this arbitration panel, it will meet its legal obligations, if any, to Mr. Falfas, as they ultimately may be determined. The Company will also continue to honor the confidentiality of Mr. Falfas' contract and the arbitration hearings and will have no further comment regarding this personnel matter."

 

Source: http://www.prnewswire.com/news-releases/cedar-fair-comments-on-recent-news-release-by-q-funding-118614059.html

[Bolliger&Mabillard]

Lots of mudslinging. This will be very interestng to see how this ordeal turns out.

[coastermaniac]

Ever since winter 2003 when Cedar Fair bought Six Flags (which came to be Geauga Lake then came to be a GHOST TOWN) my appreciation for Cedar Fair vanished completely.

[Bolliger&Mabillard]

^I don't think it's fair to criticize CF for closing GL. That was bound to happen no matter wh owned it. CF just took it off life support. However I will agree it seems like some unethical things have gone on behind closed doors, and it would appear Q wants to bring those going-ons to light.

[KI Kidd]

Cedar Fair files proxy statement to hold another Special Meeting:

 

Not surprisingly they are recommending that untiholders vote against the proposals Q is putting forth. A date will be set once the proxy is approved by the SEC.

 

SANDUSKY, Ohio, March 29, 2011 /PRNewswire/ -- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced that it has filed a preliminary proxy statement with the Securities and Exchange Commission regarding a Special Meeting of Unitholders requested by Q Funding III, L.P. and Q4 Funding, L.P. (Q Investments), which together beneficially own 5,687,276 units, or approximately 10.28% of the outstanding units of Cedar Fair.

 

Q Investments has requested a Special Meeting of unitholders to vote on an amendment of the limited partnership agreement to give unitholders the right to nominate directors for election to the Board of Directors. However, Q Investments' proposal is inconsistent with the applicable governance documents of Cedar Fair and Cedar Fair Management, Inc., its General Partner, which requires that the regulations of the General Partner be amended in order to give unitholders the right to nominate directors for election to the Board of Directors. In particular, Q Investments' proposal is solely an amendment of the Company's partnership agreement and does not include the required amendment to the regulations of the General Partner. Therefore, Q Investments' proposal would be ineffective to accomplish the goal of giving unitholders the right to nominate directors for election to the Board of Directors.

 

In addition, Q Investments' proposal does not require that any unitholder intending to nominate potential directors for election to the Board of Directors provide any advance notice of, or any information with respect to, such nominee. The fact that Q Investments' proposal lacks any basic procedural or informational requirements means that nominations could be made in a disorganized manner that is not in the best interests of unitholders. As a result, the Board of Directors recommends a vote "AGAINST" Q Investments' proposal.

 

However, the Board of Directors understands unitholders may desire to have the right to nominate potential directors for election to the Board of Directors. Therefore, and as an alternative to Q Investments' proposal, the Company is putting two proposals on the agenda for this upcoming Special Meeting that, if approved, would give the unitholders the right to nominate directors for election to the Board of Directors in a manner that is consistent with the applicable governance structure of Cedar Fair and its General Partner. Specifically, the two proposals by the Company are (i) an amendment to the regulations of the General Partner to permit the limited partnership agreement to include a provision giving unitholders the right to nominate potential directors for election to the Board of Directors and (ii) an amendment to the limited partnership agreement to establish certain procedures and information requirements pursuant to which unitholders can nominate potential directors for election to the Board of Directors.

 

The Company has offered these proposals in order to provide unitholders with an opportunity to vote on proposals that are compliant with the governance structure of Cedar Fair and its General Partner and that, if approved, would effectively establish the right of unitholders to nominate directors for election to the Board of Directors in an orderly, organized and uniform manner.

 

Link to article: http://www.prnewswire.com/news-releases/cedar-fair-files-preliminary-proxy-statement-for-requested-special-meeting-of-unitholders-118839414.html

[jedimaster1227]

http://toledoblade.com/business/2011/04/22/Shareholder-questions-Cedar-Fair-s-CEO-plans.html

 

Cedar Fair LP's largest shareholder, which has asked for the resignations of two board members of the Sandusky amusement park firm, said in a regulatory filing Thursday that it has no confidence in the board's ability to pick a successor for Chief Executive Dick Kinzel, who plans to retire this year.

 

Q Investments, which has an 18.1 percent stake in Cedar Fair and has forced a May 24 special meeting to allow shareholders to vote on the ability to nominate board members, said in its filing with the Securities and Exchange Commission that it has received reports that the board has considered Mark Shapiro as a possible replacement for Mr. Kinzel.

 

Mr. Shapiro was the chief executive at rival chain Six Flags Inc. from 2005 through June, 2009, when the rival amusement park company filed for Chapter 11 bankruptcy. In 2010, when the company emerged from bankruptcy, Mr. Shapiro was removed and Al Weber, Jr. was named interim CEO. Shortly afterward, Jim Reid-Anderson, a health-care industry advisor, was named CEO.

 

In its letter, Q Investments asks why Cedar Fair would "consider the executive [Mr. Shapiro] who oversaw the decline in earnings that brought the company into bankruptcy rather than someone like Jim Reid-Anderson, the outstanding new CEO of Six Flags, who has overseen the company during its Phoenixlike rebirth."

 

A spokesman for Cedar Fair said the company was unlikely to comment on the letter by Q Investments.

[coasternut]

Anyone is better than "Big Dick." He's past his prime and needs to go - NOW. I feel Shapiro breathed life into the 6 Flags parks. Yes, they entered bankruptcy during his rein, but they were on that path long before he headed the 6 Flags chain.

[Bolliger&Mabillard]

^Yea, but his (Shapiro's) "let's speed up before we hit the ground" mentality didn't help.

[KI Kidd]

The unnecessary praise of the current leadership at SIX should not go unnoticed. That was a very interesting tidbit that Q included. Were they simply taking another jab at Mr. Kinzel, or is there perhaps some merit to the rumor that Q would be more then a little interested in merging the two companies if (when?) they manage to take control of CF.

[Jew]

Honestly, Shapiro would be a good short term solution for Cedar Fair. They desperately need someone who will catch them up to the rest of the industry in "extra" stuff that generates revenue without a ton of additional cost. Stuff like advertising in the parks, front of the line passes, VIP Tours, etc.

[Ace Of Spades]

I too like the idea of him as an interm CEO, perhaps for a few years, to get the CF parks moving. He had the right attitude when controlling the SF parks, so hopefully he could do the same here.

[coasternut]

I too like the idea of him as an interm CEO, perhaps for a few years, to get the CF parks moving. He had the right attitude when controlling the SF parks, so hopefully he could do the same here.

 

I'm in total agreement with your statement. All the Cedar Fair parks have fallen way behind (in all aspects) during the past several years.

[ABW]

But what's Mark Shapiro going to do to with all the Tilt-A-Whirls still left at the Cedar Fair parks?

[Skycoastin Steve]

So which ad wrap will go on the Millennium Force trains?

[braztaz]

So which ad wrap will go on the Millennium Force trains?

 

That's my concern. I never want to see that happen on such high-quality Cedar Fair coasters.

 

Cedar Fair's at least got better morals than Six Flags...

[dippindotsguy8]

Cedar Fair's at least got better morals than Six Flags...

 

Q Funding would beg to differ.

 

I agree though, I would absolutely hate to see the whole rolling billboard thing happen with CF's coasters. Nothing screams "we're desperate" like wrapping coaster trains.

[chadster]

CP's Magnum XL could have the perfect partner in an ad wrap with the sponsor matching the name of the ride

[CoasterGuy06]

Cedar Fair just needs someone to bring them into the 21st century. Just think about how long it took them to have a chainwide season pass that could be scanned at the front gate at each park rather than you having to go to guest relations and getting a comp ticket at any park that was not your home park.

[Bolliger&Mabillard]

I'm still not so sure about Shapiro being the right guy. There was tons of bashing him with decisions like removing flats, those god-awful highlighter shirts (Knott's has the best uniforms in the chain...don't f%$# with them!) the Dark Knight fiasco, A barbershop. I mean...I wouldn't want to see him leading Cedar Fair.

[CoasterPrince]

Have fun with Shapiro Cedar Fair! Big Spin's and Dark Knights coming soon.

[Bolliger&Mabillard]

Have fun with Shapiro Cedar Fair! Big Spin's and Dark Knights coming soon.

NOOOOOOOOOOOOO!

[FeelTheFORCE]

I wouldn't mind seeing modern Wild Mouse coasters built at some of these parks in need of more family rides like that. Kings Island doesn't have one at all, and Cedar Point has an extremely outdated one. In my opinion that would be a great addition at both parks.

 

Referring back to what Jew said, I agree and I would also welcome a Flash Pass system at a park like Cedar Point. I can't express enough how annoying it is to have to consistently plan around the crowds year after year, and only have a brief window at the beginning and end of the season where crowds are bearable. Now that I will be graduating from college and will be working all day every day in the summer with no vacation time, I think it would be awesome if I could go to a park like Cedar Point or Kings Island on a Saturday without having to worry about waiting in lines.

Edited April 25, 2011 by FeelTheFORCE

[CoasterGuy06]

^ Yeah I imagine Six Flags makes a pretty penny off of Flash Pass.

 

And let's not act like Shapiro removed rides just to remove them. The rides that were removed were either old, required a lot of extra maintenance, were low capacity, unpopular, or a combination of these. It was under his watch that the deal with Baynum Painting was struck. Almost every major coaster that is 10years old or older has been repainted in the last few seasons at Six Flags, which is something CF has also lagged behind at.