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, TMZ reports.
According to the report by TMZ, US’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!
Red Lobster 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.”
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.