PHIADELPHIA, PA - The iconic seafood chain Red Lobster has filed for Chapter 11 bankruptcy protection, a direct consequence of a disastrous "Endless Shrimp" promotion that overwhelmed operations and led to significant financial losses. In a late Sunday announcement, the company revealed its intention to restructure under new ownership controlled by its lenders, securing $100 million in financing to maintain operations throughout the process.
Red Lobster, founded in 1968 and known for democratizing seafood dining, has seen a turbulent past few years, including multiple ownership changes. Most recently, Thai Union, a major seafood supplier, took control in 2020 but announced plans to divest in January due to mounting losses.
The bankruptcy filing follows the closure of 99 Red Lobster locations nationwide, driven by soaring lease and labor costs, compounded by the fallout of the ill-conceived "Endless Shrimp" deal. Despite these challenges, the company, under the leadership of recently appointed CEO and restructuring expert Jonathan Tibus, remains optimistic about its ability to emerge stronger through reorganization.
Red Lobster's estimated assets and liabilities fall within the $1 billion to $10 billion range. As it navigates the complexities of bankruptcy, the company is committed to continuing its operations and serving its loyal customer base, hoping for a revitalized future in the casual dining landscape.
