Iconic National Restaurant Chain With 600+ Locations to File For Bankruptcy

Red Lobster, the iconic seafood restaurant chain known for its cheese-flavored biscuits, is considering filing for Chapter 11 bankruptcy as it navigates a challenging financial landscape.

According to individuals familiar with the situation, the company has enlisted the expertise of law firm King & Spalding to explore restructuring options and address its mounting debt obligations.

The potential bankruptcy filing would provide Red Lobster with an opportunity to streamline its operations by renegotiating leases and shedding some long-term contracts.

Insiders reveal that the chain’s cash flows have been strained by a combination of factors, including expensive leases and rising labor costs.

Founded in 1968 with a single location in Lakeland, Florida, Red Lobster has since expanded to hundreds of restaurants across the United States and Canada, as well as international franchises.

The company’s popular cheese biscuits, introduced in 1992, have become a signature item on its menu.

Despite its long history and widespread presence, Red Lobster has experienced a series of ownership changes and management shifts in recent years.

Thai Union Group Plc, which acquired control of the company in 2021, recently wrote down its stake in Red Lobster, citing misaligned financial priorities.

In a statement, Thai Union acknowledged that the restaurant chain’s “ongoing financial requirements no longer align with Thai Union’s capital allocation priorities.”

Fortress Investment Group, a key lender to Red Lobster, is reportedly involved in the ongoing debt negotiations.

Prior to Thai Union’s acquisition, Red Lobster was owned by Golden Gate Capital, which had purchased the Orlando, Florida-based company from Darden Restaurants through a leveraged buyout in 2014.

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Thai Union initially held a 25% stake in the chain before acquiring Golden Gate’s remaining interest in 2021.