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Cirque du Soleil creditors oppose recovery strategy proposed by owners

Last Updated Jul 3, 2020 at 5:54 pm EDT

A man and woman walk by the Cirque du Soleil Big Top in Montreal's Old Port, on March 21, 2020. TTHE CANADIAN PRESS/Graham Hughes

MONTREAL — Cirque du Soleil creditors who unhappy with its recovery are planning to 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.

In a motion filed this week in Quebec Superior Court, the creditors said they won’t consent to the proposed transaction in which they would be paid less than what they are owed.

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.

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

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

The Canadian Press