Red Lobster is officially in Chapter 11 bankruptcy — a move that comes days after they shut down dozens of their restaurants amid financial distress, but it’s one that will keep its remaining branches afloat … for now.
The nation’s biggest seafood chain confirmed the news Sunday night, meaning it’s succumbed to burdensome leases, high labor costs, and, of course, its iconic all-you-can-eat shrimp deal — which, in hindsight, seems a bit too generous!
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RL revealed in court filings it has more than 100,000 creditors with estimated assets and liabilities both ranging between $1 billion to $10 billion.
The filing allows Red Lobster to keep operating while it hammers out a plan to repay its creditors … and in the meantime, the company has handed over the reins to its lenders, who’ve pitched in with $100M in financing to support the chain through bankruptcy. So, it’s business as usual for now.
Talks of the company navigating through choppy waters had been circulating for a while now … and just last week 100 restaurants were reportedly temporarily closed, and more than a dozen more were said to be fully shutting down.
Red Lobster’s also listed the entire contents of their closed restaurants on RestaurantEquipment.bid to bring in some extra dough — billing it as “the largest restaurant equipment auction ever.”
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Red Lobster first opened its doors in 1968, thanks to restaurateurs Bill Darden and Charley Woodsby. Just 2 years later, it went from humble beginnings to seafood stardom when it was snapped up by General Mills.
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