Red Lobster Files for Chapter 11 Bankruptcy Amid Financial Struggles, $1 Billion Debt, and $100 Million Financing

May 20, 2024, 01:18 PM

Red Lobster, the largest seafood restaurant chain in the U.S., has filed for Chapter 11 bankruptcy protection in a Florida court. The Orlando-based company, which has more than $1 billion in debt and less than $30 million in cash, cited onerous leases, high labor costs, and the ill-fated 'Ultimate Endless Shrimp' promotion as significant contributors to its financial struggles. The promotion alone reportedly cost the company over $11 million. Red Lobster has secured $100 million in financing commitments from its existing lenders and plans to sell 'substantially all' of its assets. Despite the bankruptcy filing, the chain will continue to operate its remaining restaurants. The filing follows the closure of dozens of locations across the nation, including eight in Texas. The company also reported having more than 100,000 creditors and liabilities ranging from $1 billion to $10 billion.