A group of Cirque du Soleil creditors are going to a US court because they believe they are the prankster in the company’s ongoing auction process.
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This small group of creditors holds approximately US $ 40 million (just over CA $ 53 million) of Cirque’s second-tier debt.
In documents filed this week in a Delaware court, these creditors sharply criticize the Cirque sale process to which a judge of the Superior Court of Quebec gave his approval in July.
“The procedure seems to have been put in place to block any offer that would bring more value to second-ranking creditors than the negligible value reflected in warrants,” they allege.
Remember that this is the proposal of another group of creditors, led by the Toronto fund Catalyst Capital, which was accepted as a seed bid in mid-July by the Cirque board of directors.
This proposal from Catalyst and its partners then replaced another proposal made in June by the owners of Cirque (TPG, Fosun and the Caisse de dépôt et placement du Québec), but which was ultimately rejected.
Photo AFP
The last performances of Cirque du Soleil shows date back to March. Here, a performance of Crystal, in January, in Riga, the capital of Latvia.
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Loaded dice?
Creditors around Catalyst are criticized by the other group of creditors for using their majority position to the detriment of smaller lenders. “Their actions are not in the best interests of second-tier creditors,” they argue.
According to these creditors, the intervention of the American courts is required to rebalance the game, although they do not question the fact that the proceedings take place mainly in Quebec.
” The gratitude [des tribunaux québécois] should not have the effect of giving carte blanche to a foreign court to render decisions that will be automatically applicable in the United States, ”they argue.
Under the submitted offer, the second-tier lenders would only receive crumbs for their money invested in Cirque, while the value of their debt would instead be on paper at US $ 154 million (approximately CA $ 205 million). .
In Quebec, Langlois lawyers and Me Gerry Apostolatos represent this group of independent creditors.
No Quebecor offer
The giant Quebecor also closed the door Thursday to the filing of a formal offer for the Circus.
“As of today, because the process seems to evolve so that it is the creditors who will become the owners, we will no longer be part of this acquisition process”, said Thursday the CEO, Pierre Karl Peladeau.
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