Without a means of resuming operations and generating revenue amid the COVID-19 pandemic, famed entertainment brand Cirque du Soleil has fired nearly 3,500 previously furloughed employees and moved towards bankruptcy.
Cirque du Soleil revealed these and other unfortunate developments in an official release this morning. The far-reaching cutbacks follow the Montreal-based company’s decision to postpone all shows and furlough 95 percent of its staff back in March.
Ongoing fiscal strains – and reported debt of somewhere around $1 billion, though company execs haven’t confirmed the figure – prompted the firings, and Cirque du Soleil is set to seek “protection from creditors…in order to restructure its capital structure” under Canada’s Companies’ Creditors Arrangement Act (CCAA).
If the CCAA protection order is approved, Cirque officials indicated that they will proceed to “seek its immediate provisional recognition” in the U.S., under Chapter 15 of America’s bankruptcy code. Chapter 15 centers on cooperation between stateside courts and those of foreign nations when companies with international assets secure domestic bankruptcy protection.
Cirque du Soleil also unveiled a stalking horse purchase agreement “with existing investors,” as part of a larger effort to assure that it receives adequate bids from any court-ordered bankruptcy auction. Essentially, the stalking horse purchase agreement sets a minimum price for the company and its assets in insolvency-prompted public auctions.
Lastly, the release outlined the nuances of the $300 million that investors will inject into the “restructured business to support a successful restart.” The capital will cover the investments of “secured creditors,” “provide relief” for fired employees (via a $15 million fund; freelancers – presumably performers – will receive assistance from a $5 million fund), and refund ticketholders.
On its website, the 36-year-old institution admitted that “we have no clear timeline on when we will be allowed to get back on stage,” owing to lockdown measures, travel restrictions, and concerns for the safety of performers and audiences.
Despite Cirque’s advising fans “to hold onto their tickets” and sidestepping the question of whether refunds are currently available, many social media users are offering words of support and encouragement.
“I’ve always admired the work behind everyone at Cirque du Soleil, hope the business can evolve to keep up with the show – both must go on,” wrote one fan.
“Can’t come soon enough. And a huge hug to all the artists. It must continue to be so difficult to remain at their incredible level with no live shows and, at a guess, less than ideal training opportunities,” stated another supporter.
However, given the lack of rescheduled dates and refund instructions, some ticketholders are politely asking when they’ll be able to get their money back.
“How can I get a refund on my March 2020 show that was scheduled in Houston? I sent an email and received no response. Thanks!” tweeted a customer.
It appears that this individual – and all other clients – will have to wait until Cirque du Soleil receives and utilizes the above-mentioned capital to issue refunds.
More as this develops.