May 21, 2024

Red Lobster considering bankruptcy filing: report


Red Lobster is reportedly considering submitting for bankruptcy to alleviate monetary pressures which have weighed on the corporate.

According to a report by Bloomberg citing individuals conversant in the discussions, Red Lobster is weighing a Chapter 11 bankruptcy submitting to renegotiate burdensome leases and tackle different long-term contracts in addition to rising labor prices.

The outlet reported that the seafood restaurant chain is being suggested by regulation agency King & Spalding on the topic, and that whereas discussions about restructuring are ongoing and that no last choices have been made a couple of bankruptcy filing.

By submitting for Chapter 11 bankruptcy, the corporate might proceed to function whereas it really works with collectors and buyers to place in place a debt discount plan that might permit it to move into the longer term on a greater monetary footing.

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Red Lobster Restaurant

Red Lobster is reportedly considering a Chapter 11 bankruptcy submitting to restructure its funds and operations. (Victor J. Blue/Bloomberg through Getty Images / Getty Images)

Red Lobster didn’t instantly reply to a request for remark.

The seafood chain has had quite a lot of house owners and main buyers because it was based in 1968 by Bill Darden and Charley Woodsby. 

General Mills acquired the corporate in 1970 and helped it quickly increase all through the U.S. and Canada, earlier than spinning it off into an impartial publicly traded firm known as Darden Restaurants over 20 years later.

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Red Lobster exterior

Red Lobster was based in 1968. (Luke Sharrett/Bloomberg through Getty Images / Getty Images)

Darden Restaurants offered Red Lobster to Golden Gate Capital in 2014. Thai Union, which beforehand had a one-fourth stake within the firm, purchased out Golden Gate’s stake within the firm in 2021.

Earlier this yr, Thai Union introduced it was planning to exit its funding in Red Lobster and take a write off after asserting in a regulatory submitting that the restaurant chain’s “ongoing financial requirements no longer align with Thai Union’s capital allocation priorities.”

Red Lobster Seafood Restaurant

Red Lobster employed a brand new CEO final month who focuses on restaurant restructruing and efficiency enchancment plans. (Don & Melinda Crawford/Education Images/Universal Images Group through Getty Images / Getty Images)

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Red Lobster introduced in Jonathan Tibus as its new CEO final month. Tibus is taken into account an knowledgeable in creating and implementing restructuring plans at underperforming eating places, retail and hospitality corporations and has led quite a few restructuring efforts.



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