Cirque du Soleil Entertainment Group has filed for bankruptcy protection as several of its circus shows across the world remain suspended due to the ongoing global health crisis.
In an announcement on Monday, the Montreal-based company revealed that it is seeking bankruptcy protection under the Companies’ Creditors Arrangement Act to restructure its balance sheet “in response to immense disruption and forced show closures as a result of the COVID-19 pandemic.”
Cirque du Soleil entered into a purchase agreement with its shareholders TPG, Fosun, and Caisse de dépôt et placement du Québec. These sponsors would acquire the company’s assets, inject $300 million of liquidity into a restructured business to support a restart, provide relief to affected employees and partners, and pay for some of the company’s remaining liabilities, including ticketholders needing refunds. Investissement Québec, which is also part of the purchase deal, will give $200 million in debt financing.
Though terms of the purchase agreement were not completely revealed, a $20 million fund will reportedly be created to support around 3500 employees that have been furloughed.
“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,” Cirque du Soleil Entertainment Group CEO Daniel Lamarre said in a release.
Cirque du Soleil’s bankruptcy protection filing came three months after production of its shows were temporarily suspended in March. Prior to the pandemic, Cirque du Soleil was running 44 shows in different parts of the world, and six of those were based in Las Vegas alone. These are Michael Jackson ONE at the Mandalay Bay, The Beatles LOVE at The Mirage, Oat the Bellagio, Mystère at Treasure Island, Zumanity at New York-New York, and KA at the MGM Grand. People with tickets for cancelled performances were set to be refunded within 30 days.
While the bankruptcy filing puts Cirque du Soleil’s future in doubt, George Kliavkoff, president of entertainment and sports at MGM Resorts ― which is Cirque du Soleil’s largest global partner ― said in a memo that they do not believe Cirque’s filing will impact their ability to restart their shows when appropriate. Kliavkoff, however, pointed out that the decision to reinstate entertainment at MGM Resorts “will continue to be driven by health and safety mandates and guidelines established by government agencies and by business demand.”