Red Lobster, the casual dining chain that brought seafood to the masses with inventions like popcorn shrimp and “endless” seafood deals, has filed for Chapter 11 bankruptcy protection.
The 56-year-old chain made the filing late Sunday, days after shuttering dozens of restaurants.
“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth," said Red Lobster CEO
Red Lobster said it will use the bankruptcy proceedings to simplify its operations, close restaurants and pursue a sale. As part of the filings, Red Lobster has entered into a so-called “stalking horse” agreement, meaning it plans to sell its business to an entity formed and controlled by its lenders.
In recent years, Red Lobster has been struggling with increasing competition from fast casual chains like
The
Darden got his start in the restaurant business in
Darden sold Red Lobster to
Red Lobster had legions of fans for dishes like lobster linguini and its buttery
“There is no one of-woman-born who does not like Red Lobster cheddar biscuits. Anyone who claims otherwise is a liar and a Socialist," comedian and actress
But the restaurant had trouble keeping up with competitors and bringing in younger customers.
Then last fall, Red Lobster lost millions of dollars on its Ultimate Endless Shrimp promotion, which charged
“We knew the price was cheap, but the idea was to bring more traffic in the restaurants,”
Garnier said the deal did work, and restaurant traffic increased. But more guests opted for the
In January,
Restaurant liquidator TAGeX Brands announced last week that it would be auctioning off the equipment of over 50 Red Lobster locations that were recently closed. The store closures span across more than 20 states — reducing Red Lobster’s presence in cities like
The seafood restaurant chain said in a court filing that it has more than 100,000 creditors and estimated assets between
Red Lobster operates 700 locations worldwide.
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