Show an ad over header. AMP

Coronavirus bankrupts Cirque du Soleil

The fate of Cirque du Soleilwill be decided in a courtroom, not under the big top.

Driving the news: The live events giant yesterday filed for bankruptcy protection in Canada and confirmed furloughs of around 3,500 employees.


What happened: The coronavirus pandemic decimated the company almost entirely reliant on revenue from live events.

  • Just weeks before the virus hammered North America, Caisse de dépôt et placement du Québec (CDPQ) had increased its stake in the company and its debt was trading just below par.

What now: Cirque's existing private equity owners, including TPG Capital, offered a reorganization plan whereby they'd retain a 55% equity stake.

  • A source says that 26 parties signed nondisclosure agreements with Cirque, but this was the only formal offer received.
  • It includes $300 million in new investment, $200 million of which is debt financing from Investissement Québec.
  • That money also would include the establishment of a $15 million fund for furloughed employees, and a $5 million fund for contractors.

Between the lines: Cirque creditors aren't pleased with an arrangement that would leave them without a controlling interest. They're expected to submit a rival plan today, ahead of a Canadian court hearing.

  • This reflects something that's emerging as a big difference between our current financial crisis and the prior edition: Banks and other lenders are in a much stronger financial position, and seem more interested in fighting to defend their cap table superiority.
  • These conflicts could become more prevalent as bankruptcies continue to rise. As we noted yesterday, there already have been more global corporate defaults in 2020 than in all of 2019.

The bottom line: Neither the private equity firms nor the creditors can really control when Cirque resumes operations. But the "winner" could significantly impact what that resumption looks like, and how many of the 3,500 employees get rehired.

The climate stakes of the Supreme Court fight

Ruth Bader Ginsburg's death and the battle over her vacant Supreme Court seat have real implications for energy and climate policy.

Why it matters: If President Trump replaces her, the court will likely become more skeptical of regulations that claim expansive federal power to regulate carbon under existing law, and perhaps new climate statutes as well.

Keep reading... Show less

The tech war between the U.S. and China escalates

Economic tension between the U.S. and China continues to escalate but is shifting in focus — away from the tit-for-tat trade war and toward a more direct confrontation over the future of technology at the heart of the conflict between the world's two largest economies.

Why it matters: The battle between the U.S. and China was always about tech supremacy and the direct confrontation could result in an accelerated splintering of global supply chains and a significant reduction of international commerce.

Keep reading... Show less

CDC updates guidance to say coronavirus can be spread through the air

The CDC updated its guidance on Friday to acknowledge that the coronavirus can be transmitted through the air at distances farther than six feet and through"droplets or small particles, such as those in aerosols" like coughs or sneezes.

Why it matters: The update — which was little noticed until a CNN story was published Sunday — comes months after scientists pushed for the agency to acknowledge the disease was transmissible through the air. The CDC previously said that close person-to-person contact was the bigger concern.

Keep reading... Show less

Top Mueller prosecutor: "We could have done more"

Andrew Weissmann, one of former special counsel Robert Mueller's top prosecutors, says in his new book, "Where Law Ends: Inside the Mueller Investigation," that the probe "could have done more" to take on President Trump, per The Atlantic.

Why it matters ... Weissmann argues that the investigation's report didn't go far enough in making a determination regarding Trump's potential obstruction of justice: "When there is insufficient proof of a crime, in volume one, we say it. But when there is sufficient proof, with obstruction, we don’t say it. Who is going to be fooled by that? It’s so obvious."

Keep reading... Show less

Trump's next moves in Supreme Court fight

President Trump's choices to succeed Justice Ruth Bader Ginsburg are down to two women, both federal appeals court judges.

The frontrunners are Amy Coney Barrett of Chicago, the early favorite, and Barbara Lagoa, who is viewed as easier to confirm. The Senate confirmed Lagoa 80-15 last year, so many Democrats have already voted for her.

Keep reading... Show less

The TikTok deal's for-show provisions and flimsy foundations

The new deal to rescue TikTok from a threatened U.S. ban — full of provisions aimed at creating the temporary appearance of a presidential win — looks like a sort of Potemkin village agreement.

How it works: Potemkin villages were fake-storefront towns stood up to impress a visiting czar and dignitaries. When the visitors left, the stage set got struck.

  • Similarly, many elements of this plan look hastily erected and easily abandoned once the spotlight moves on.
Keep reading... Show less

More than 3 million Americans have registered to vote on social media this year

An estimated 2.5 million+ Americans have registered to vote on Facebook, Instagram, and Messenger, Facebook announced Monday. More than 733,000 Americans have registered to vote so far via Snapchat.

Why it matters: The broad reach of social media platforms makes them uniquely effective at engaging voters — especially younger voters who may not know how to register to vote or be civically engaged.

Keep reading... Show less

Wall Street: Recession is over

U.S. economic activity fell more sharply in the second quarter of this year than during any other quarter in history. It's also going to grow more sharply in the third quarter of this year than during any other quarter in history.

  • The recession is over, according to Wall Street, with current forecasts showing sustained economic growth through 2021 and beyond.
Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories