|
court-martialled
Join Date: Feb 2001
Location: Brig
Posts: 0
|
News: Company that built "X" is bankrupt
Quote:
Published: Sunday, July 7, 2002
Turmoil rocking X coaster
By Naush Boghossian
Staff Writer
SANTA CLARITA -- The twists and turns of Six Flags California's X thrill ride seem tame compared with the legal turmoil surrounding the prototype "4th dimension" coaster.
The ever-ballooning costs of building X drove the design company, Arrow Dynamics, Inc., into bankruptcy, with the final cost of the thrill ride reaching a reported $24 million -- millions over the estimated price.
But Arrow Dynamics and Six Flags disagree on who is responsible for paying those bills, forcing the designer to file Chapter 11 and the theme park company to sue.
When Arrow Dynamics filed for bankruptcy protection in December, Six Flags filed a lawsuit asserting that the design firm breached its contract by using its money to pay pre-existing debts unrelated to the ride, among other charges, and the theme park is seeking control of the technology of X.
At the same time, the owner of Six Flags made an offer to buy the Utah-based company's assets.
The design firm's chief executive officer believes the theme park's motive is to own the company's intellectual property consisting of drawings and designs, particularly of X, to gain an advantage in the roller coaster market.
"This is a unique and innovative ride, and a lot of parks are interested in it," CEO Fred Bolingbroke said. "They're trying to put us out of business and buy up the intellectual property."
He believes the design company should remain independent of the theme park and sell to a company with an interest in all amusement parks.
"We're not interested in selling to Six Flags because that would preclude us from selling to other amusement parks in the industry, and it would damage the relationship we have with parks throughout the nation and the world," Bolingbroke said.
Iven disputes the claim that Six Flags offered to buy Arrow.
"We have not offered to buy Arrow, and we have no intent of buying Arrow," he said. Iven did acknowledge that the company placed an offer for the portion of the company's technology that relates to the X ride. "We have no intent of putting Arrow out of business."
Arrow's attorneys contend that the theme park did offer to buy Arrow Dynamic's assets but it failed to tempt the design firm.
"The offer from Six Flags was for a very nominal sum plus the settlement of the lawsuit," said Steve McCardell, an attorney who represents the creditors who provided supplies and services to build the ride. "It's a decision that involves a lot of people, and if they made a reasonable offer, then it is very well likely that Arrow might in fact consider that offer."
Although neither party can agree on the amount owed, according to Bolingbroke, Arrow Dynamics owes $4.6 million to creditors and vendors who worked who worked on X. Though he won't specify the amount, he said a majority of the debt is directly a result of the thrill ride. "We didn't get paid what we thought we'd get paid on X," he said.
But in its complaint, Six Flags claims that the ride cost more than the agreed $6.6 million. They are suing the design company for $11.73 million for delaying the opening of the ride and estimated court costs it will sustain from vendors that have sued the theme park company for bills it claims the design company was responsible to pay.
Attorneys representing the design firm said when Six Flags saw the cost estimates in January, it decided to hire its own subcontractors to complete the steel structural components. Then in March, Six Flags agreed to pay the remaining costs of the ride to Arrow Dynamic's subcontractors.
Grant said Six Flags paid some vendors and not others, adding that both signed a letter of intent agreeing that if the final cost of the ride exceeded $11 million, Arrow Dynamics would assume 50 percent of the overrun up to $300,000.
"We have paid and fulfilled our obligations far in excess of our contractual obligations to Arrow, and they are obligated to pay the vendors," said Tom Iven, executive vice president of Six Flags Theme Parks.
The design company will most likely file a counter-complaint by Monday, saying that both companies were aware the ride was going to cost more than $6.6 million, Grant said.
Bolingbroke said the company hasn't taken action because they are trying to maintain a good relationship with the theme park company that is the largest customer in the industry.
Prior to working on X, Bolingbroke said Arrow Dynamics was a financially healthy company that had opened up several rides in the last few years.
The company, which started in 1946, is responsible for some of the first rides at Disneyland including the Dumbo ride, the spinning teacups and the Matterhorn coaster. It has also designed six rides at Six Flags Magic Mountain including "Viper" and "Ninja."
While the two parties are involved in a legal quagmire, X remains indefinitely closed as Six Flags waits for replacements parts. Six Flags representatives say they hope to reopen the ride within the next two weeks. The design company said a part with a manufacturing flaw makes the coaster a less comfortable ride.
|
 |
07-07-2002, 06:03 PM
Linear Mode
