Red Lobster files for bankruptcy, restaurants will remain open

Red Lobster has filed for voluntary Chapter 11 bankruptcy in Florida, the company confirmed in a declaration late Sunday night.

The 56-year-old seafood chain — the largest of its kind in the U.S. — said it would “drive operational improvements, simplify the business through a reduction in locations and pursue the sale of substantially all of its assets as an ongoing concern.” “

Red Lobster has agreed to sell its business to a new entity wholly owned and controlled by its creditors, the so-called stalking horse arrangement. The company said it has received a $100 million financing commitment from its lenders to fund ongoing operations.

O bankruptcy petition lists the company’s assets as being worth between $1 billion and $10 billion.

The company recently announced was closing about 99 locations across the country.

But the company stressed that its remaining restaurants will remain open during the bankruptcy process and that it has “worked with suppliers to ensure operations are not affected.”

Jonathan Tibus, the company’s CEO, said, “This restructuring is the best path forward for Red Lobster. It allows us to address numerous financial and operational challenges and emerge stronger and refocused on our growth.”

Founded in 1968, Red Lobster grew to nearly 700 locations in 2019. But it failed to regain its footing after the pandemic. Between 2019 and 2023, US sales fell 13% in net value. Since then, the private company has struggled under the weight of its debt, while seeing payments to suppliers interrupted.

This coincided with a series of executive turnover announcements and ill-fated strategic initiatives, including an all-you-can-eat shrimp offering that resulted in heavy losses.

The company has also had multiple owners over the past five years; more recently, seafood conglomerate Thai Union took a controlling stake, but announced in January its intention to sell it.

This article was originally published in NBCNews. with