Cirque Lenders Fighting Company’s Restart Plan

Cirque’s creditors are upset, to put it mildly, at the company’s restructuring plan announced June 29 by company CEO Daniel Lamarre. The lenders who hold most of Cirque’s nearly $1 billion million debt are not accepting a bid by the company to seek bankruptcy protection. Under Cirque’s restructuring proposal, TPG Capital, China-based Fosun Capital Group and the Caisse de dépôt et placement du Québec have offered to purchase and restart the company for $400 million. They would thus have a 55-percent stake in the company.

In this plan, lenders would be paid pennies on the dollar for what they are owed. This is a serious concern for the creditors, who refuse to agree to the TPG-led proposal. That group includes Toronto’s Catalyst Capital, several U.S. investment firms, including Los Angeles Dodgers co-owner Todd Boehly’s Eldridge Industries, which also owns Dick Clark Productions, The Hollywood Reporter and film distributor A24.

Several weeks ago, according to the Montreal Gazette, those lenders made their own offer to salvage Cirque. That effort reportedly would have saved the nearly 3,500 employees who were permanently laid off under the current restructuring proposal. The group claims it was “blindsided” when Cirque announced its restart proposal on June 29. The lenders have since asked the Quebec superior court judge reviewing the process to dismiss Cirque’s plan, which would give TPG’s group controlling interest in the company.

The plan announced by Lamarre and TPG can’t legally advance without the support of the majority of the lenders. The next court date is scheduled for Friday. According to reporting in the New York Post, if the lenders’ effort is turned back, the group would ask to replace Lamarre as Cirque’s CEO and as a board member, along with the rest of the board. They would ask to replace the entire Cirque Board of Directors with an independent restructuring officer.

{ SOURCE: Las Vegas Review-Journal }