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The entertainment company says the Quebec Superior Court will hear its application for bankruptcy protection on Tuesday, and it will seek bankruptcy protection in the U.S., per Cirque's press release. If granted, Cirque will then seek provisional recognition in the USA under Chapter 15 of the Bankruptcy Code.
The Montreal-based entertainment company, which runs six shows in Las Vegas, has struggled to keep its business running amid coronavirus restrictions that started in March, forcing it to lay off about 95 percent of its workforce and temporarily suspend its shows.
Under the bankruptcy filing, Cirque du Soliel has entered into a stalking horse purchase agreement with its stakeholders TPG, Fosun, and Caisse de depot et placement du Quebec.
Cirque received $300 million in new funding as part of a plan to restart.
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But creditors are unlikely to agree to the deal, which could result in existing debt holders getting about 45 percent equity in the restructured company, a source familiar with the discussions told Reuters. The company has also cut its worldwide touring productions.
It bought Blue Man Productions in 2017, followed by children's entertainment company VStar Entertainment Group in 2018. However, other than TPG Capital, which holds the majority control of the company, five other groups have shown interest, he said.
The Las Vegas shows that were cancelled included O at the Bellagio, KA at MGM Grand, The Beatles LOVE at the Mirage, Mystere at Treasure Island, Zumanity at New York-New York and Michael Jackson ONE at Mandalay Bay.
Under a confidentiality agreement, Lamarre said he's not at liberty to provide details. It says its offer has a total value of $420 million.