Cirque du Soleil files for bankruptcy
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Los Angeles - Cirque du Soleil has filed for bankruptcy.
The Montreal-based live entertainment company - which has become an icon in production shows in Las Vegas - has filed for protection from creditors under the Companies Creditors Arrangement Act (CCCA), and if the Superior Court of Quebec grants the order when the case goes to court on Tuesday, the company will seek immediate provisional recognition in the United States in the US Bankruptcy Court.
The CCCA order gives the company the ability to restructure and reopen in the future, after the organisation’s income was slashed due to the ongoing coronavirus pandemic.
Daniel Lamarre, president and CEO of Cirque du Soleil Entertainment Group, said in a statement: “For the past 36 years, Cirque du Soleil has been a highly successful and profitable organisation. However, with zero revenues since the forced closure of all of our shows due to Covid-19, management had to act decisively to protect the company’s future.
“I look forward to rebuilding our operations and coming together to once again create the magical spectacle that is Cirque du Soleil for our millions of fans worldwide.”
Prior to the pandemic, Cirque du Soleil was producing six shows on the famous Las Vegas Strip, but they were all forced to cancel performances in mid-March to stop the spread of the virus.
Originally, the company furloughed its staff members, but due to lack of income, they have now announced that approximately 3 480 employees have had their contracts terminated.
According to the company’s statement, the termination “allows employees to maximise and accelerate the financial compensation that they can obtain by immediately receiving payment on account of all accrued vacation time”.
However, artists and staff of the Resident Shows Division, including those in Las Vegas, are not affected by this measure as the Vegas shows are expected to resume before the rest of the company’s productions and events.
In connection with the filing, Cirque du Soleil has entered into a “stalking horse” purchase agreement with its shareholders and debt providers which would provide $300 million into the restructured business to support a successful restart, provide relief for employees and partners and assume liabilities.
Lamarre added: “The Purchase Agreement … provide(s) a path for Cirque to emerge from CCAA protection as a stronger company. The robust commitment from the sponsors - which includes additional funds to support our impacted employees, contractors and critical partners, all of whom are important to Cirque’s return - reflects our mutual belief in the power and long-term potential of our brand.”