Cirque du Soleil’s financial situation was even worse than expected before the company was forced to cancel all of its shows due to the pandemic, documents filed in court this week revealed.This information and many others were unveiled this week when the Cirque took shelter from its creditors before the Superior Court.
Judge Louis-Joseph Gouin granted 10 days of protection to Cirque on Tuesday to allow it to continue its activities.
The documents present a financial situation that was far from brilliant even before the start of the pandemic which forced the cancellation of all shows around the world.
Cirque's debt totaled US $ 1.57 billion (C $ 2.134 billion) on March 31. This is far more than the US $ 1 billion in debt that has been mentioned so far in several reports.
Cirque lost in 2018 and 2019 respectively US $ 71 million ($ 96.4 million) and US $ 80 million ($ 108.6 million).
The situation was so problematic at the very beginning of the crisis that Cirque du Soleil even feared that creditors would get their hands on its bank accounts. To reduce this risk, an amount of US $ 48.6 million was transferred on March 24 from Desjardins to HSBC Bank (not related to lenders).Caisse and Fund loansOf the US $ 1.57 billion in debt, US $ 885 million is now owed to secured creditors (nested around the Toronto-based Catalyst Capital fund). An amount of US $ 60 million loaned in 2019, unsecured, is also due to the Caisse de depot et placement du Quebec and the Fonds de solidarité FTQ.
The boss of the Fund, Gaétan Morin, did not hide this week that he had no hope of seeing the color of this money again. "We have written off almost all of this unsecured loan," he told La Presse.
Bonuses for executivesCirque du Soleil also admits in the documents that unpaid Cirque employees are unlikely to ever be reimbursed. "It is difficult to imagine a scenario in which all the sums due to these employees will be reimbursed in full," it reads.
Cirque du Soleil wants certain information to remain hidden from the general public in the process, including the salaries of its directors. The information "should be kept strictly confidential and sealed," the company said in court documents.
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