After the Covid-19 pandemic closed all its shows, private equity-backed Cirque du Soleil Inc. has raised the curtain on a restructuring with a bid from its current investors that is opposed by lenders.

The Montreal-based live entertainment company on Monday, June 29, announced it had sought protection under the Companies’ Creditors Arrangement Act in the Superior Court of Québec with plans to sell its assets. Cirque du Soleil plans to file a Chapter 15 case if the court grants interim relief at a Tuesday hearing.

Shareholders TPG Capital LP, Fosun International Ltd. and Caisse de dépôt et placement du Québec have agreed to serve as stalking horse with an offer that would inject $300 million in liquidity and assume certain liabilities, including trade payables and claims of ticket holders for canceled shows. Investissement Québec would support the offer with $200 million in funding.

In addition, the investment would finance a $15 million fund for terminated employees and a $5 million fund for claims of artisans and freelance artists. Cirque du Soleil plans to rehire a “substantial majority” of its 3,480 employees terminated in the wake of the pandemic.

Secured creditors would receive $50 million in unsecured takeback debt and 45% of the reorganized Cirque du Soleil, and the debtor would repay a $50 million loan made by Catalyst Capital Group Inc. and other secured lenders.

A source familiar with the situation, however, said the lenders had not approved the deal and would not support it, noting it could not be approved over their objection.

A Cirque du Soleil representative declined comment.

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