Advertisement
Paul Marotta/Getty

Cirque du Soleil has filed for bankruptcy protection and terminated thousands of jobs as they attempt to cope with the impact of the coronavirus pandemic.

The company made the announcement in a press release on Monday, explaining that the difficult decision was part of a solution to "restructure its capital structure" and "protect the company's future" in the wake of the pandemic.

The filing comes three months after Cirque du Soleil temporarily suspended its shows around the world, including six in Las Vegas and 10 others, including O, Michael Jackson One, and The Beatles LOVE, which were on tour, according to CNN.

"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization," Daniel Lamarre, the president and CEO of Cirque du Soleil Entertainment Group, said in a statement. "However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the Company’s future."

A spokesperson for Cirque du Soleil did not immediately respond to PEOPLE's request for comment.

To cope with their financial struggles, the company said it will be entering a "stalking horse" agreement or purchase agreement with its existing shareholders, TPG, Fosun, and Caisse de dépôt et placement du Québec, as well as Investissement Québec as a debt provider, according to the press release.

The shareholders, or "Sponsors," will acquire the company's assets in cash, debt, and equity to "establish two funds totaling $20 million to provide additional relief to impacted employees and independent contractors."

That agreement is then expected to serve as the "minimum acceptable bid" in an auction to draw other bidders and "achieve the highest value available," the press release stated.

Additionally, the Sponsors will put forward $300 million towards the "restructured business to support a successful restart, provide relief for Cirque du Soleil’s affected employees and partners."

The Sponsors will also assume some of the company’s "outstanding liabilities," such as ticketholders who were impacted by the cancellation of performances.

Along with the financial agreements, Cirque du Soleil announced that the approximately 3,480 employees who were furloughed in March would now be terminated from their employment, claiming the layoffs were a "critical step" in its "restructuring and eventual plans to restart operations."

Those who were let go would be given financial compensation, including vacation time and other unemployment benefits, but the hope was to bring a "substantial majority" of them back once mandatory shutdowns were lifted and business conditions allowed.

"Given resident shows in Las Vegas and Orlando are expected to resume before the rest of the Company’s shows, the artists and show staff of the Resident Shows Division are not affected by this measure to allow for a swift and efficient return as soon as the ban on gatherings is lifted and show operations can resume," the company added in the press release.

Cirque du Soleil also asked that potential bidders "specify their intentions with regard to Cirque’s terminated employees," when putting in an offer that would include the financial compensation for these employees and how they plan on maintaining the business in Quebec, as well as rebuilding operations as a whole.

"The Purchase Agreement and SISP [sale and investment solicitation process] provide a path for Cirque to emerge from CCAA [Companies’ Creditors Arrangement Act] protection as a stronger Company," Lamarre said.

"The robust commitment from the Sponsors – which includes additional funds to support our impacted employees, contractors, and critical partners, all of whom are important to Cirque’s return – reflects our mutual belief in the power and long-term potential of our brand," Lamarre continued.

"I look forward to rebuilding our operations and coming together to once again create the magical spectacle that is Cirque du Soleil for our millions of fans worldwide," he added.

This story originally appeared on People .