ORLAND, Fla. – Red Lobster Management LLC, along with its direct and indirect operating subsidiaries, owner and operator of the Red Lobster restaurant chain, announced the company has voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida.
The company intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.
As part of these filings, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders.
The 56-year-old chain made the filing late Sunday, days after shuttering dozens of restaurants, according to the Associated Press.
Red Lobster’s remaining restaurants will remain open and operating as usual during the Chapter 11 process, continuing to be the world’s largest and most-loved seafood restaurant company, the company said in a press release posted to its website.
The company has been working with vendors to ensure that operations are unaffected and has received a $100 million debtor-in-possession financing commitment from its existing lenders.
CEO Jonathan Tibus called the bankruptcy filing 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,” Tibus said. “The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”
