Red Lobster Files for Chapter 11 Bankruptcy in Florida, Plans to Sell Assets and Restructure Operations

Red Lobster, the iconic seafood chain known for its Cheddar Bay Biscuits, has made a splash with its latest announcement. The company has filed for voluntary Chapter 11 bankruptcy in Florida, a move that has sent shockwaves through the restaurant industry.

With nearly 700 locations across the United States, Red Lobster is the largest seafood chain of its kind in the country. However, the company has faced financial challenges in recent years, exacerbated by the impact of the COVID-19 pandemic. In an effort to strengthen its financial position and maximize value for stakeholders, Red Lobster has decided to pursue a sale of substantially all of its assets as a going concern.

The bankruptcy petition filed by Red Lobster lists the business’s assets as worth between $1 billion and $10 billion. The company has agreed to sell its business to a new entity owned and controlled by its lenders, a move known as a stalking horse arrangement. Additionally, Red Lobster has secured a $100 million financing commitment from its lenders to fund ongoing operations.

Despite the bankruptcy filing and the closure of some 99 locations across the country, Red Lobster has assured customers that its remaining restaurants will remain open during the process. The company’s CEO, Jonathan Tibus, expressed confidence in the restructuring, stating that it is the best path forward for Red Lobster.

Founded in 1968, Red Lobster has had a storied history, but has faced challenges in recent years. The company’s U.S. sales fell 13% between 2019 and 2023, and it has struggled under its debt load. Multiple ownership changes and executive turnover have also contributed to the company’s financial woes.

As Red Lobster navigates the bankruptcy process, customers can rest assured that their favorite seafood dishes will still be available at their local restaurant. The company is working closely with vendors to ensure that operations are unaffected, and is focused on emerging stronger and more focused on growth.

The news of Red Lobster’s bankruptcy filing has sparked discussions within the restaurant industry and among loyal customers. As the company works towards a successful restructuring, all eyes will be on how Red Lobster navigates this challenging chapter in its history.