Cirque du Soleil files for bankruptcy protection and cuts 3,500 jobs

New York(CNN Business) Cirque du Soleil, the producer of a number of Las Vegas acrobatic shows, has filed for bankruptcy protection.

In an announcement Monday, the Montreal-based company blamed its situation on the "immense disruption and forced show closures as a result of the Covid-19 pandemic" and is aiming to restructure its debt with assistance from the Canadian government and private equity firms.

The filing comes three months after it temporarily suspended production of its shows, including six in Las Vegas. It also has about 10 shows on tour across the world, including "O," "Michael Jackson One," and "The Beatles LOVE."

Cirque entered a "stalking horse" bid from its largest backers, including a mix of multinational private equity firms from the United States, China and Canada for $420 million. That offer is intended to be a starting point in an auction to draw other bidders.

The company has also received $300 million in fresh funding to "support a successful restart, provide relief for Cirque du Soleil's affected employees and partners, and assume certain of the company's outstanding liabilities," it said in the release.

Cirque is drowning in nearly $1 billion in debt, according to multiple reports. That's becoming increasingly untenable as its productions remain suspended. To help stem the financial loss, Cirque has laid off roughly 3,500 employees.

"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization," said Daniel Lamarre, CEO of Cirque du Soleil Entertainment Group in a release. "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."

Correction: An earlier version of this story misstated the stalking horse bid amount.