Red Lobster has filed for Chapter 11 bankruptcy protection days after shuttering dozens of restaurants.
The seafood chain has been struggling with rising lease and labor costs in recent years and also promotions like its iconic all-you-can-eat shrimp deal that backfired.
Demand for one such recent promotion overwhelmed restaurants, reportedly contributing to millions in losses.
The seafood restaurant chain said in a court filing late Sunday that it has more than 100,000 creditors and estimated assets between $1 billion and $10 billion. The company's estimated liabilities are between $1 billion and $10 billion.
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The bankruptcy petition is signed by CEO Jonathan Tibus, a corporate restructuring specialist who took the top post at Red Lobster in March.
Restaurant liquidator TAGeX Brands announced last week that it would be auctioning off the equipment of over 50 Red Lobster locations that were recently closed. The store closures span across more than 20 states — reducing Red Lobster’s presence in cities like Denver, San Antonio, Indianapolis and Sacramento, California.
Maintaining stability at the chain has been problematic due to multiple ownership changes over its 56-year history. Earlier this year, Red Lobster co-owner Thai Union Group, one of the world’s largest seafood suppliers, announced its intention to exit its minority investment in the dining chain.
Thai Union first invested in Red Lobster in 2016 and upped its stake in 2020. At the time of the January announcement on its plans to divest, CEO Thiraphong Chansiri said the COVID-19 pandemic, industry headwinds and rising operating costs had hit the dining chain hard and caused “prolonged negative financial contributions to Thai Union and its shareholders.”
For the first nine months of 2023, the Thailand company reported a $19 million share of loss from Red Lobster.
Red Lobster’s roots date back to 1968, when the first restaurant opened in Lakeland, Florida. The chain expanded rapidly since then and runs more than 700 locations worldwide.