Red Lobster Files for Bankruptcy Amid $1 Billion Debt and Endless Shrimp Losses

May 21, 2024, 03:05 PM

Red Lobster, the popular U.S.-based seafood restaurant chain, has filed for Chapter 11 bankruptcy protection in a Florida court. The filing comes after the company closed dozens of locations and secured $100 million in financing commitments from its existing lenders. The chain, which operates approximately 551 U.S. locations, cited $1 billion in debt and less than $30 million in cash as key financial challenges. Red Lobster's financial woes were exacerbated by its 'endless shrimp' promotion, which reportedly caused $11 million in losses. The promotion is currently under investigation, with scrutiny on the role of the chain's majority owner, Thai Union. Additionally, the chain struggled to recover from the impacts of the pandemic and the acquisition by Golden Gate Capital in 2014. Despite the bankruptcy filing, Red Lobster has assured customers that most of its restaurants will remain open during the proceedings.