The American Seaford restaurant icon, Red Lobster, has announced plans to file for Chapter 11 bankruptcy in an effort to overcome over $1 billion in debt. It is expected that the majority of restaurants will close over the coming weeks, but no clear closure plan has been yet released.
Red Lobster CEO Jonathan Tibus said of the decision, “This restructuring is 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. 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.”
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Excerpt from thepostmillennial.com
On Sunday, Red Lobster announced that it had filed for Chapter 11 bankruptcy and secured $100 million in debtor-in-possession financing commitments from existing lenders. The company was over $1 billion in debt.
The seafood chain noted that while remaining restaurants will continue operating during the proceedings, the number of locations is set to be drastically reduced in the coming weeks.
In a press release, Red Lobster explained that it had entered into a “stalking horse purchase agreement,” meaning the company “will sell its business to an entity formed and controlled by its existing term lenders.”
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