Red Lobster said it will use the bankruptcy proceedings to simplify its operations, close restaurants and pursue a sale.
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 Jonathan Tibus, a corporate restructuring expert who took the top post at the chain in March.
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 Chipotle and Panera as well as rising lease and labor costs. Its all-you-can eat deals for shrimp and lobster, which it has offered for decades, also became increasingly expensive.
The Orlando, Florida-based chain was founded by Bill Darden, who wanted to make seafood restaurants more accessible and affordable for families.
