Cirque du Soleil has announced that it has filed for bankruptcy protection as a result of COVID-19.
The company shared from its headquarters in Montreal that it is seeking protection from creditors under the Companies’ Creditors Arrangement Act in its home country. If granted, Cirque will then seek provisional recognition in the U.S. under Chapter 15 of the Bankruptcy Code.
A “stalking horse” purchase agreement is in place in connection with the filing, meaning that Cirque du Soleil is available for purchase by new ownership.
“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 our shows due to COVID-19, management had to act decisively to protect the company’s future,” said Daniel Lamarre, president and CEO of Cirque du Soleil Entertainment Group. “The Purchase Agreement and SISP (sale and investment solicitation process) provide a path for Cirque to emerge form CCAA protection as a stronger company.”
As part of the company’s restructuring, approximately 3,480 employees that were previously furloughed back in March have been terminated. According to a press release shared by Cirque, the termination “allows employees to maximize and accelerate the financial compensation” that they can receive through unemployment assistance programs. However, this does not affect the artists and show staff of the resident shows in Las Vegas and Orlando, as they are expected to resume before the rest of the company’s shows elsewhere.
This filing also affects Blue Man Group, which was acquired by Cirque in 2017. The iconic group, which currently operates a resident show at Universal Orlando’s CityWalk, shared a statement on Twitter about the news:
“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,” continued 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.”