The seafood restaurant chain filed for bankruptcy, succumbing to onerous leases, high labor costs and a disastrous unlimited shrimp promotion.
By Reshmi Basu and Claire Boston, BloombergA Red Lobster restaurant is seen in Schaumburg, Ill., Monday, May 20, 2024. Red Lobster is seeking bankruptcy protection days after closing dozens of restaurants.
Red Lobster plans to hand control of the company to its lenders, led by Fortress Investment Group, who have agreed to provide $100 million in financing to support the chain through bankruptcy. The takeover offer is in the form of a stalking horse bid, meaning it will set the floor price for Red Lobster’s assets and is subject to better bids should any materialize in the coming weeks, according to court documents.
Red Lobster traces its roots to a single restaurant in Lakeland, Florida in 1968. It expanded rapidly in the 1970s and 1980s, and developed a loyal following for its Cheddar Bay Biscuits. The company now operates more than 550 restaurants in the US and Canada.
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