Cirque du Soleil Files for Bankruptcy Protection

Brenda Watkins
July 1, 2020

The Cirque du Soleil, whose aerobatic shows have been halted by COVID-19, has filed for creditor protection while it develops a plan to restart its business.

As expected, the company said in its filing announcement the refinancing move was "in response to huge disruption and forced show closures as a result of the COVID-19 pandemic". The application is scheduled to be heard by the Quebec Superior Court on Tuesday, and the company will also seek its immediate provisional recognition in the USA under Chapter 15.

Investment firms TPG, Fosun Group and Caisse de Depot et placement du Quebec have submitted a proposal to buy the circus company's assets.

The company also has about 10 shows on tour across the world, including "O", "Michael Jackson One", and "The Beatles LOVE".

In March, the company furloughed more than 4,000 people, or 95% of its workforce, and temporarily suspended its shows in Las Vegas, one of its prominent areas.

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Cirque du Soleil's secured creditors will receive $50 million of unsecured, takeback debt as well as a 45% equity state in the company.

The company has also received USA $436 million in fresh funding to "support a successful restart, provide relief for Cirque du Soleil's affected employees and partners, and assume certain of the company's outstanding liabilities", it said in the release. However, other than TPG Capital, which holds the majority control of the company, five other groups have shown interest, he said.

In May, the Quebec government loaned the struggling Cirque $200 million as it attempted to restructure its finances.

The company also said the artists and show staff of resident shows in Las Vegas and Orlando, which are expected to resume before the rest of its shows, would not be impacted by the layoffs.

Along with the attempt to reduce debt via the CCAA, the company set up what's called a "stalking horse" purchase agreement, paving the way for investors to purchase the company at a reduced price.

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