Illustration: Aïda Amer/Axios

The fate of Cirque du Soleil will 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.

Go deeper

Updated Sep 20, 2020 - Health

7 states set single-day coronavirus case records last week

Data: Compiled by Axios; Map: Danielle Alberti/Axios

Seven states set new highs last week for coronavirus infections recorded in a single day, according to the COVID Tracking Project and state health departments. Wisconsin and Nebraska surpassed records set the previous week.

Why it matters: Problem spots are sticking in the Midwest, although the U.S. is moving in the right direction overall after massive infection spikes this summer.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 31,328,238 — Total deaths: 964,839— Total recoveries: 21,503,496Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 6,857,967 — Total deaths: 199,884 — Total recoveries: 2,615,949 — Total tests: 95,841,281Map.
  3. Health: CDC says it mistakenly published guidance about COVID-19 spreading through air.
  4. Media: Conservative blogger who spread COVID-19 misinformation worked for Fauci's agency.
  5. Politics: House Democrats file legislation to fund government through Dec. 11.
  6. World: U.K. upgrades COVID alert level as Europe sees worrying rise in infections — "The Wake-Up Call" warns the West about the consequences of mishandling a pandemic.
Sep 20, 2020 - Health

Trump's health secretary asserts control over all new rules

HHS Secretary Alex Azar and President Donald Trump. Photo: Mandel Ngan/AFP via Getty Images

Heath and Human Services Secretary Alex Azar wrote a memo this week giving him authority over all new rules and banning any of the health agencies, including the FDA, from signing any new rules "regarding the nation’s foods, medicines, medical devices and other products," the New York Times reports.

Why it matters: The story further underscores reporting that health and scientific agencies are undergoing a deep politicization as the Trump administration races to develop a coronavirus vaccine, as Axios' Caitlin Owens has reported. Peter Lurie, a former associate commissioner of the FDA, told the Times that the Azar memo amounted to a "power grab."

Get Axios AM in your inbox

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Subscription failed
Thank you for subscribing!