Showstopper: Cirque du Soleil files for bankruptcy protection

Cirque du Soleil files for creditor protection, terminates 3480 jobs

Cirque du Soleil files for creditor protection amid COVID-19 woes

Canadian entertainment firm Cirque du Soleil is to cut 3,500 jobs after striking a deal to avoid bankruptcy.

Cirque said it will seek protection under the Companies' Creditors Arrangement Act (CCAA), and its application will be heard on Tuesday by the Superior Court of Quebec.

"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization", said Daniel Lamarre, CEO of Cirque du Soleil Entertainment Group in a release.

As part of the investment, government body Investissement Québec will provide $200 million in debt financing. They allege they are owed almost $1.5 million for work.

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.

It said it meant to rehire "a substantial majority" of terminated employees, business conditions allowing, once coronavirus-related shutdowns were lifted and operations could resume.

Lamarre said there are "five to six groups" interested in acquiring the Montreal-based company, but they will have to meet the conditions of the offer now on the table, which requires Montreal to remain the company headquarters.

"Everyone was waiting for us to take shelter from our creditors", said Lamarre, who added he doesn't believe the company waited too long before filing for creditor protection.

Cirque is drowning in almost $1 billion in debt, according to multiple reports. TPG would hold 33 per cent, while Fosun and the Caisse will each have 11 per cent. A creditor group will likely come back with a formal counteroffer by July 10, one of the people said; it has already drafted its own non-binding offer for Cirque, according to another one of the people.

About 700 of them would be in Las Vegas, where the company earned about 40 per cent of its $1 billion in revenue a year ago and where it hopes to open a show as early as November, Chief Executive Officer Daniel Lamarre said in an interview. Credit rating firm Moody's cited the high leverage when it downgraded Cirque to junk territory in March.

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