Cirque du Soleil cuts 3,500 jobs to avoid bankruptcy

"Everyone was waiting for us to take shelter from our creditors", said Lamarre, who added he doesn't believe the company waited too long before filing for creditor protection.

After laying off 95% of its employees in mid-March due to the effects of the COVID-19 and the closure of its theaters and shows worldwide, Cirque du Soleil has filed for bankruptcy.

Secured creditors of Cirque du Soleil will receive $50 million in unsecured debt, plus a 45 percent equity stake in the restructured company and repayment of $50 million in loans. Its profits were estimated at US$155 million.

The entertainment company says the Quebec Superior Court will hear its application for bankruptcy protection on Tuesday, and it will seek bankruptcy protection in the United States, per Cirque's press release.

The circus' revenue was completely devastated by the pandemic, resulting in dozens of its productions being cancelled across the world.

Investissement Québec's involvement requires the investors to commit to keeping the company's headquarters in Montreal.

"We know, because of the proposal on the table, that the Cirque is saved", CEO Daniel Lamarre said in a phone interview.

Cirque du Soleil cuts 3,500 jobs to avoid bankruptcy

"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". They allege they are owed almost $1.5 million for work.

The current Quebec government, headed by a nationalist centre-right party, came to power on a pledge to do more to prevent foreign takeovers of the province's marquee brands.

The company, which grew from a troupe of Quebec street performers into a global live entertainment giant, entered into a so-called stalking horse purchase agreement with its top shareholders - TPG, Shanghai-based Fosun International Ltd. and Caisse de Depot et Placement du Quebec.

Under the terms of the deal - a stalking-horse bid that needs court approval - the investors are also committing to maintaining key company leadership positions in Quebec and rehiring as many Quebec-based workers as possible. To help stem the financial loss, Cirque has laid off roughly 3,500 employees.

Refunds for shows cancelled because of the pandemic.

The firm had to pause production of all of its shows, including six in Las Vegas, back in March.