Cirque du Soleil, known for its mesmerizing shows that fuse acrobatics with performance art, filed for bankruptcy Monday as the coronavirus continues to ravage the entertainment and theater industries.
MONTREAL Canada (Agencies) – Cirque du Soleil is seeking “Chapter 15” bankruptcy protection in the United States to facilitate a “stalking horse” purchase agreement negotiated with its existing shareholders to draw in more investment. The company seeks to create a $15 million employee fund to provide financial assistance for the almost 3,500 employees who have been laid off.
The filing comes three months after it temporarily suspended production of its shows, including six in Las Vegas. It also has about ten shows on tour across the world, including “O,” “Michael Jackson One,” and “The Beatles LOVE.“
Cirque du Soleil entered a “stalking horse” bid from its largest backers, including a mix of multinational private equity firms from the United States, China, and Canada for $420 million. The offer is intended to be a starting point in an auction to draw other bidders.
The company has also received $300 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,” said the press release.
The company is drowning in nearly $1 billion in debt, according to multiple reports. That’s becoming increasingly untenable as its productions remain suspended. To help stem the financial loss, Cirque has laid off roughly 3,500 employees.
“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. “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.”
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