Red Lobster Seeks Bankruptcy Protection to Strengthen Finances

Red Lobster Seeks Bankruptcy Protection to Strengthen Finances

Red Lobster Management LLC, the owner and operator of the Red Lobster restaurant chain, has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Middle District of Florida. The Orlando-based company aims to use the bankruptcy process to streamline its finances, simplify its business operations, and pursue a sale of substantially all its assets as a going concern.

The company has entered into a stalking horse purchase agreement to sell its business to an entity formed and controlled by its existing term lenders. Additionally, Red Lobster has secured a $100 million debtor-in-possession financing commitment from these lenders to support its operations during the bankruptcy process. The company’s restaurants will continue to operate as usual while the firm works on its restructuring plan.

Red Lobster has cited financial pressures from onerous leases and high labor costs as key factors leading to its bankruptcy filing. The company, which lists assets and liabilities each in the range of $1 billion to $10 billion, was acquired by Thai Union Group Plc in 2020. Thai Union had previously disclosed plans to exit its stake in the chain. Despite the bankruptcy proceedings, Red Lobster intends to maintain its operations across its numerous locations in the US, Canada, and international markets.


Other news in business