One of Quebec's most famous organization is seeking court protection from its creditors.
Cirque du Soleil Entertainment Group has been forced to cancel all shows and lay off more than 3,000 workers as a result of the COVID-19 pandemic.
Today, the company is in the commercial division of the Superior Court of Québec seeking an order under the Companies' Creditors Arrangement Act.
If Cirque du Soleil succeeds, it will seek protection from creditors in the United States under Chapter 15 of the U.S. Bankruptcy Code.
According to a company news release, existing shareholders TPG, Fosun, and Caisse de dépôt et placement du Québec would buy "substantially all" of the assets through a combination of cash, debt, and equity.
The sponsors would provide US$300 million liquidity to enable the restructured business to restart.
The debt provider would be Investissement Québec, which is prepared to put up US$200 million.
If all goes according to plan, there would be two funds created, totalling US$20 million, "to provide additional relief to impacted employees and independent contractors".
“For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization," president and CEO Daniel Lamarre said in a news release. "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. The Purchase Agreement and SISP [sale and investment solicitation] provide a path for Cirque to emerge from CCAA protection as a stronger company."