LaPresse: Many workers among Cirque du Soleil’s creditors

{ Translated from the original French using Google Translate }

Not only has Cirque du Soleil been unable to keep its employees employed, but people working under contract for Cirque du Soleil have still not been paid for work performed before the announcement of the massive layoffs on last month.

Cirque has adopted a policy of suspension of payments and obligations towards its suppliers, in particular consultants or freelancers, who have agreements with Cirque. Some of them told La Presse that Cirque did not pay the invoices sent before the massive layoffs announced in mid-March. In some cases, these are invoices for the winter months. In other cases, the invoices date from the fall months, which causes them financial stress.

One of these suppliers, who does not want to be identified because he is afraid of the repercussions on his career, fears that a restructuring will occur “quickly” and that the debts towards “several hundreds” of workers will be “blocked” or renegotiated at the discount. “We are talking about circus craftsmen here: directors, lighting designers, choreographers, artistic coordinators, trainers, etc. “He says. For some of these people, Cirque is their only client.

You should know that the Cirque employs many of these craftsmen full time, but also hires many by contract, according to its needs. Depending on the projects, freelancers in marketing, technology, programming and design can also obtain contracts. It was not possible to obtain details of the overall amount of claims owed to suppliers or the precise number of workers affected. “The Circus is a private enterprise,” said spokesperson Caroline Couillard simply.

Cirque explains that the COVID-19 crisis led to a “sudden and total” paralysis of its activities. “Consequently, we were forced to adopt drastic measures to preserve our remaining liquidity and ensure the sustainability of the Cirque du Soleil Group,” said an internal note obtained by La Presse. “Our liquidity is under enormous pressure due to this unexpected and unprecedented event, and unfortunately, the duration of the pandemic and its impact on the future of the Circus remain unknown at this time,” we can read.

“Unfortunately, we have no alternative but to temporarily suspend the payment of our obligations to our suppliers and partners while we are working to get through this crisis and stabilize the situation. We are aware that this action, which is necessary in the circumstances, could have repercussions on your operations, and rest assured that we sincerely regret it, ”he said.

Cirque du Soleil announced on March 19 the layoff of 95% of its workforce, or 4,679 employees.

Cirque has only a very small team still in place and the salary of the CEO, Daniel Lamarre, has just been reduced by 50%. “It was he who made the proposal to the board of directors,” says Caroline Couillard. For the time being, no other employee or officer still in office has suffered a drop in salary.

Last week, La Presse revealed that the Cirque is in a difficult financial position, to the point that the organization maintains that it does not even have the “means” to take help from the federal government to rehire the workers laid off in March.

Management explains the situation by the fact that Canada’s emergency wage subsidy program requires proof of payment for the 75% portion of employee wages to be given before being eligible to receive federal funding. “Although we would very much like all of our employees to benefit from this program, our current cash situation puts us in a position where we do not have the capacity to make such payments in advance,” said a document obtained by The Press .

Cirque has about 1 billion in debt. The main shareholders of Cirque are the American fund TPG, the Chinese group Fosun and the Caisse de depot et placement du Quebec. Given the situation in which Cirque finds itself, placing the organization safe from its creditors is one of the options being considered by management, sources confirmed to La Presse this spring.

Cirque du Soleil in six dates

• April 2015: A group led by TPG Capital, of San Francisco, concludes an agreement to acquire Cirque du Soleil for approximately 1.75 billion US dollars.

• June 2019: La Presse reveals that the Cirque du Soleil Group is considering going public.

• November 2019: CEO Daniel Lamarre confirms that the stock market listing project is on the ice “for the moment”, arguing that the stock market is not favorable.

• February 2020: The Caisse de depot et placement du Québec buys the remaining 10% stake from Guy Laliberté in Cirque.

• March 2020: Cirque announces the layoff of 95% of its 4,679 employees.

• April 2020: Sources confirm to La Presse that one of the three options considered by Cirque is to place the company safe from its creditors.

{ SOURCE: LaPresse }