— Hedge fund files its eighth lawsuit against Cedar Fair in the past 12 months
— Costs of responding to Q Investments’ lawsuits and Special Meeting requests said to be approximately $3 million so far, equivalent to approximately 6 cents per unit, which the Board believes could have been better spent to create greater value for unitholders
SANDUSKY, Ohio, June 16, 2011 /PRNewswire/ — The Board of Directors of Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today declared that the latest lawsuit by Q Funding III, L.P. and Q4 Funding, L.P. (together, “Q Investments”), filed on June 14, 2011, in the Court of Chancery of the State of Delaware, seeking to force the Company to hold yet another Special Meeting of Unitholders, is a costly waste of unitholders’ resources.
On June 10, 2011, the Board announced in a press release that Q Investments’ request for a Special Meeting to remove the General Partner was deficient because it failed to provide certain information required to convene such a meeting, including adequate information regarding the successor General Partner, an opinion of counsel with respect to the tax impact of the removal of the General Partner and specific language for the proposed amendment to the Partnership Agreement. Contrary to assertions in the lawsuit, the Board also responded to Q Investments’ request, with a letter addressed June 10, 2011, that the request was deficient.
“Although Q Investments has seen an attractive total return of more than 60 percent over the past 18 months on its investment in Cedar Fair, it continues to harass the Board, clog the courts and frustrate our unitholders with its endless attacks and groundless assertions,” said Dick Kinzel, Cedar Fair’s President and Chief Executive Officer. “As we stated publicly in our release and privately in our response letter to Q Investments’ request, this latest request for a Special Meeting is deficient, according to the requirements stated in our Limited Partnership Agreement, and will not be granted. Once again, Q Investments is proving that it will stop at nothing in its effort toward creating an exit strategy for itself and its hedge fund investors, regardless of what might best serve the long-term value creation interests of all our unitholders.”
Kinzel added, “We continue to hear from our unitholders that they are frustrated with Q Investments’ incessant rants and misleading communications. We have spent approximately $3 million so far in legal and professional costs – equivalent to earnings of approximately 6 cents per unit – dealing with Q Investments’ Special Meeting requests and the eight lawsuits it has filed against the Company and its Board of Directors in the past 12 months, and the costs continue to mount. When is Q Investments going to realize that there are better ways we could be spending that money to create greater value for unitholders?”
About Cedar Fair
Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Its parks are located in Ohio, California, North Carolina, South Carolina, Virginia, Pennsylvania, Minnesota, Missouri, Michigan, and Toronto, Ontario. Cedar Fair also operates the Gilroy Gardens Family Theme Park in California under a management contract. Cedar Fair’s flagship park, Cedar Point, has been consistently voted the “Best Amusement Park in the World” in a prestigious annual poll conducted by Amusement Today newspaper.