The Montreal-based circus company Cirque du Soleil said it was filing for protection from creditors under Chapter 15 of federal bankruptcy since the pandemic has kept the group off the stage.
Chapter 15 is a bankruptcy proceeding giving a company from outside the U.S. access to the U.S. bankruptcy courts.
Cirque du Soleil, which filed the petition in the Superior Court of Quebec, plans to work with the Canadian government and private-equity firms to restructure its debt.
Reports say that if the Canadian court accepts the petition, Cirque du Soleil will then file in U.S. Bankruptcy Court.
In connection with the filing, Cirque du Soleil is entering a stalking-horse agreement with its three shareholders - the private equity firm TPG, the Chinese investment company Fosun FOSUF, and the pension fund Caisse de dépôt et placement du Québec - and with Investissement Quebec - to set a floor for potential bids from others.
The company will receive a $300 million infusion of capital from its backers in order to support a successful restart as well as provide relief for employees.
Of the $300 million, Investissement Quebec will provide $200 million of debt financing. Investissement Quebec provides financing and other assistance to businesses that want to expand in and into the province.
Cirque du Soleil laid off 95% of its staff in March due to lack of funds.
The company said that it is not bankrupt but is seeking protection because "we have no clear timeline on when we will be allowed to get back on stage."
The Las Vegas Sun reported that Cirque du Soleil was producing six shows on the Strip when casinos and entertainment closed in mid-March to prevent covid-19 from spreading.
Cirque du Soleil currently has all performances worldwide on pause, except for the company's Land of Fantasy show, which reopened on June 3 in China.
In a tweet, the company said that all tickets that were already purchased remain valid.