Cirque du Soleil has filed for bankruptcy protection just three months after temporarily canceling dozens of its flashy acrobatic shows worldwide because of the . The Canadian company said it plans to fire about 3,500 circus workers and back-office employees as part of a restructuring plan.
A group of investors will inject $300 million in cash in the Montreal-based company to keep it afloat during bankruptcy proceedings, Cirque du Soleil said. The plan requires approval from a Québec judge.
It's a hard landing for a world-famous troupe that had started in the 1980s as a small group of street performers in Quebec and grew to become the largest theatrical producer in the world, performing in 450 cities across more than 50 countries for almost 200 million spectators.
"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization," CEO Daniel Lamarre said in a statement. "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."
It's unclear if Cirque du Soleil will refund ticket holders for their purchase. The company stopped short of saying no refunds on its website and has instead advised its customers "to hold on to their tickets."
Cirque du Soleil temporarily closed its Las Vegas and Orlando shows on March 15 and 17, respectively, due to the coronavirus pandemic. All told, the company has canceled 44 U.S. shows including in Boston, Chicago, Denver, Houston, New Orleans and Salt Lake City. The entertainment company, which tours worldwide, began canceling its shows in Italy, Russia, Israel, Australia, South Korea and Egypt on March 13.
Cirque du Soleil officials said they "have no clear timeline on when we will be allowed to get back on stage."
About $5 million of the $300 million in cash will go toward paying Cirque du Soleil's contractors, including freelance artists. Another $15 million will pay ongoing benefits to terminated employees who were laid off but the company intends to bring back.
Soon after canceling shows, Cirque du Soleil laid off nearly 4,700 employees, or 95% of its workforce, a move Lamarre said was necessary to weather financial hit from COVID-19.
In an FAQ on its website, Cirque du Soleil said it is not bankrupt. But the company is filing for relief from its debts under Chapter 15 of the U.S. bankruptcy code, a way for non-U.S. companies to seek protection from creditors in an American bankruptcy court.
Cirque du Soleil also filed a restructuring plan Monday under Canada's Companies' Creditors Arrangement Act and wants to submit a similar filing in a U.S. bankruptcy court in coming days.