Cirque Du Soleil Files For Bankruptcy, Lays Off 3,500 Employees
Colby Smith • 30 June, 2020
The Montreal-based entertainment company has a hearing scheduled with the Superior Court of Québec today.
Cirque Du Soleil, the live-entertainment monolith renowned for its experimental art circus shows, has filed for bankruptcy after three months of not having shows due to the pandemic.
Back in March, the Canadian organization had to cancel shows around the world in response to the conditions of the coronavirus. After three months without revenue from live performances, the world-renowned circus show is filing "to restructure under the Companies' Creditors Arrangement Act in response to immense disruption and forced show closures as a result of the COVID-19 pandemic," the company wrote in a press release. The loss of Cirque du Soleil would be a particular blow to London, where their frequent forays to the capital have filled the Royal Albert Hall and the O2 Arena with dazzling flips and spectacular stunts.
Accordingly, the company is attempting to restructure its debt with private equity holders as well as Investissement Québec in a "stalking horse" agreement that would set "the minimum acceptable bid [$420 million] in a court-supervised Sales and Investment Solicitation Process" so that when auctioned, the company and its stakeholders would retain a high market value. Additionally, the agreement would put aside a total of $20 million for terminated employees and independent contractors.
"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization. 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," said President and CEO of Cirque du Soleil Entertainment Group, Daniel Lamarre.
"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."
In its recent restructuring, the company has had to terminate 3,480 employees that were previously furloughed in March in response to COVID-caused shutdowns around the world. However, the Canadian company maintains that it will attempt to re-hire their laid-off workforce with assistance funds:
"The Sponsors' bid and related restart plan includes a number of considerations for employees, including the creation of $15 million in assistance funds for those whose employment has been terminated and the intent to rehire a substantial majority of terminated employees, business conditions allowing, once and as mandatory shutdowns are lifted and operations can resume."