According to Restaurant Business Online, American seafood staple, Red Lobster, has filed for Chapter 11 bankruptcy protection. The Orlando-based chain cited a shifting consumer landscape and an unsuccessful “all-you-can-eat shrimp” promotion as key factors in its financial struggles.
The company is now seeking a buyer and has a preliminary agreement with one lender. Additionally, Red Lobster plans to streamline operations by closing more underperforming locations. This comes after they abruptly shut down 100 restaurants earlier in May.
Red Lobster, owned by Thai Union, has significant debt obligations, including $264.7 million to Fortress Credit and $29.3 million to Wells Fargo. However, existing lenders have committed $100 million in financing to support the company during the bankruptcy process.
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