Cirque du Soleil creditors oppose recovery strategy proposed by owners

Cirque du Soleil creditors oppose recovery strategy proposed by owners

Cirque du Soleil creditors oppose recovery strategy proposed by owners

MONTREAL — Cirque du Soleil creditors who are unhappy with its recovery plan will oppose the purchase agreement between the entertainment company and its current shareholders, which they claim is “doomed to fail.”

A group of 13 institutions, including Catalyst Capital Group, which holds about US$1 billion of guaranteed debt, says there is a way forward without the need for financial support from the Quebec government that would still maintain Cirque’s head office in Montreal.

“At no time will (lenders) consent to the proposed transaction in which secured creditors would be paid below the total amount of debt owed to them,” they said in a motion filed earlier this week in Quebec Superior Court.

The aerobatic company announced on Monday its decision to file for creditor protection, a move that led to the termination of nearly 3,500 employees.

The creditors say the current owners — the Texan fund TPG Capital, the Chinese firm Fosun and the Caisse de depot et placement du Quebec — should not be the so-called stalking horse bid. That will be argued at the next hearing, scheduled for July 10.

Creditors would rather negotiate directly with advisers mandated by the company.

“We do not understand why the (Cirque) did not want to engage in the negotiation of a final agreement with our group by opting for an agreement with its shareholders knowing that the secured creditors had already rejected it,” said William Hardie, general manager of Houlihan Lokey, who advises creditors, in an emailed statement.

The current owners propose to inject US$300 million, including a US$200-million loan from Investissement Quebec. Creditors would own 45 per cent of the Cirque and US$50 million of unsecured debt, while the owners would share the remaining 55 per cent. They would establish two funds totalling US$20 million to support Cirque workers and pay freelancers.

The proposal values the company at around US$420 million, less than half of what is owed to secured creditors.

According to the court-appointed monitor, the Cirque lost US$10 million in 2017, US$71 million in 2018 and US$80 million in 2019, while acquisitions increased revenues nearly 18 per cent to US$1.04 billion.

Since its restructuring is now supervised by the courts, the Cirque would not comment on the arguments raised by its creditors.

This report by The Canadian Press was first published July 3, 2020.

The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Health Minister Tyler Shandro said Thursday that the province was ready to move forward with Phase 2A and B in the coming weeks. (Photo by Paul Taillon/Office of the Premier)
COVID restrictions for retail, sports and performers further eased

Occupancy in stores and malls boosted to 25 per cent from 15 per cent

Advocate file image
Red Deer COVID cases continue to decline

249 cases in Red Deer, down from 565 peak on Feb. 22

Cilantro and Chive Owner Rieley Kay (centre) and Guest Chef City Councillor Cara Hoekstra (right) hand over a donation of more than $1,000 to he Lacombe and District Historical Society, care of Executive Director Melissa Blunden at the Michener House Museum and Archives. (Photo Submitted)
Over $1,000 donated to Lacombe and District Historical Society

The donation came from the proceeds from the February Burger of the Month at Cilantro and Chive

File photo
Gov’t of Alberta identifies estimated 300 new COVID-19 cases Sunday

Online COVID-19 dashboard unavailable as upgrades being completed

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

A SAGA member (left) poses as Jessi Hanks (right) with Castle Restaurant puts up a safe space sticker to display on the restaurant’s front door. Shaela Dansereau/ Pipestone Flyer.
SAGA Wetaskiwin works with local businesses to display they are a safe space

The safe space stickers show that its a safe and inclusive space.

David and Collet Stephan leave for a break during their appeal hearing in Calgary on Thursday, March 9, 2017. THE CANADIAN PRESS/Todd Korol
Alberta Appeal Court orders 3rd trial for parents in toddler’s meningitis death

Stephans were accused of not seeking medical attention sooner for Ezekiel, who had meningitis when he died

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Vaccine hesitancy decreases in B.C. as mass immunizations set to begin: poll

Two-thirds of British Columbians, and Canadians, would get the vaccine as soon as possible

A woman walks through Toronto’s financial district on Monday, July 30, 2018. A new poll suggests most Canadians believe there’s still a long way to go to achieve gender equality in this country. THE CANADIAN PRESS/Graeme Roy
Canadians, especially women, say gender equality not achieved in Canada: Poll

Poll results themselves underscore the challenge, with more men believing equality had been achieved

This image provided by Harpo Productions shows Meghan, The Duchess of Sussex, left, in conversation with Oprah Winfrey. (Joe Pugliese/Harpo Productions via AP)
Race, title and anguish: Meghan and Harry explain royal rift

Meghan said she struggled with concerns within the royal family about her son’s skin colour

Kiara Robillard is seen in an undated handout photo. When the pandemic began, Robillard had to rush back home to Alberta from California, where she had been living for five years, after she was struck by a truck that broke her spine in two places. THE CANADIAN PRESS/HO-Kiara Robillard, *MANDATORY CREDIT*
‘It kind of clicks:’ Text4Hope program helps with depression, anxiety during pandemic

Participants receive one text message every morning for three months

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Supporters rally outside court as Pastor James Coates of GraceLife Church is in court to appeal bail conditions, after he was arrested for holding day services in violation of COVID-19 rules, in Edmonton, Alta., on Thursday March 4, 2021. THE CANADIAN PRESS/Jason Franson
‘Law remains valid:’ Pastor accused of violating health orders to remain in jail

The Justice Centre for Constitutional Freedoms is representing the pastor

Most Read