SEAFOOD chain Red Lobster is bankrupt – and struggling to explain exactly what that means.
Although the chain will close some locations, it took social media to tell fans that it won’t go out of business.
1
The company filed for Chapter 11 bankruptcy on Sunday night, revealing it was $1 billion in debt.
The legal bankruptcy process will help the chain sell some of its assets to pay off debts.
That means selling restaurant properties.
While it’s not yet clear how many locations will close, company executives said Red Lobster’s footprint is “bloated.”
Read more about restaurants
52 locations are expected to close soon, according to CBSalthough no official number has been confirmed.
Now, Red Lobster is playing offense, reaching out to customers via Facebook to assure fans that the company isn’t going out of business.
‘DEAR GUESTS’
On Tuesday, Red Lobster shared a declaration explaining to customers that the company would survive bankruptcy.
“Together, we have a lot worth rooting for,” he said. “We are here and ready to continue making memories with you.”
More than 50,000 people reacted to the post, which now has around 10,000 comments.
“Our family loves Red Lobster,” commented one customer. “Many birthdays and Mother’s Day celebrations have already taken place there! Thank you for the transparency. We are rooting for you!”
The network responded to several comments, including this one.
“We will always be here to help you,” the company responded. “Your celebrations are our celebrations and we couldn’t be more grateful for your support.”
Others revealed why they consistently go to Red Lobster.
“One of my grandchildren always chooses Red Lobster for his birthday dinner,” said one person. “We like it too!”
Some are already missing out on seafood because locations in their area have already closed.
“I would love to go, but they closed the one in my town,” said one commenter.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps businesses eliminate debts they cannot pay.
The process allows businesses to start from scratch and gain access to new credit.
Overseen by federal courts, bankruptcies allow a company to more easily sell its assets to pay creditors, according to Investopedia.
Chapter 11, a common process for businesses, is used to restructure a business with the goal of staying open — even if it means selling most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows collaboration between U.S. and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” according to the United States Courts.
SHRIMP SCRIMP
While the reasons for Red Lobster’s bankruptcy are diverse, many have pointed to a loss the company suffered when it offered “Endless Shrimp.”
The offer became very popular, losing the company $11 million dollars.
In some places the shrimp have already reached their end.
Red Lobster has already closed several restaurants across the country.
Fashion retailer Express recently filed for bankruptcy.
A beloved appliance store in California recently filed Chapter 7, closing the business completely.
This story originally appeared on The-sun.com read the full story
