Red Lobster has filed for voluntary Chapter 11 bankruptcy in Florida, the company confirmed in a statement late Sunday night.
The 56-year-old seafood chain, one of the largest of its kind in the U.S., said it plans to “drive operational improvements, simplify its business by reducing the number of stores, and pursue the sale of substantially all of its assets as a going concern.” ” he said. ”
In a so-called stalking horse arrangement, Red Lobster agreed to sell the business to a new entity that would be fully owned and controlled by the lender. The company announced that it has received a $100 million loan commitment from lenders to fund ongoing operations.
The bankruptcy filing lists the company's assets as worth between $1 billion and $10 billion.
The company recently announced it would close approximately 99 stores nationwide.
However, the company stressed that its remaining restaurants will remain open during the bankruptcy process and that it is “working with our vendors to ensure operations are unaffected.”
“This restructuring is the best path forward for Red Lobster,” said Jonathan Tibbs, CEO. We will be able to refocus our efforts on
Founded in 1968, Red Lobster had grown to nearly 700 stores by 2019, but was unable to regain its footing after the pandemic. From 2019 to 2023, U.S. sales decreased by 13% in net terms. The privately held company has since struggled with its debt burden and missed payments to vendors.
It coincided with a series of executive personnel announcements and ill-fated strategic initiatives such as the all-you-can-eat shrimp initiative that resulted in huge losses.
The company's transition has included multiple ownership changes over the past five years. Most recently, seafood conglomerate Thai Union had taken control, but announced its intention to sell in January.
