Report: Red Lobster Is Considering Bankruptcy

'Endless Shrimp' deal cost company millions
By Rob Quinn,  Newser Staff
Posted Apr 17, 2024 6:15 PM CDT
Report: Red Lobster Is Considering Bankruptcy
A Red Lobster restaurant in North Miami, Florida.   (AP Photo/Wilfredo Lee, File)

Cue the "hot water" jokes: Red Lobster is reportedly considering a bankruptcy filing after years of losses, including an $11 million third-quarter loss in 2023 that was blamed on an overenthusiastic response to the chain's expansion of its "Endless Shrimp" deal. Bloomberg, citing "people with knowledge of the matter," reports that the chain is exploring a possible Chapter 11 filing that would allow it to keep operating while it restructures its debt, renegotiates leases, and ditches long-term contracts.

Leases and labor costs have been among the chain's biggest issues, according to Bloomberg. The CEO of Thai Union Group—the company's biggest investor—also cited high interest rates and lingering issues from the pandemic earlier this year when he said the company was planning to sell its stake in Red Lobster, Global News reports. "We have determined that Red Lobster's ongoing financial requirements no longer align with our capital allocation priorities," Thiraphong Chansiri said. He reportedly told investors, "Red Lobster is over and done with." (More Red Lobster stories.)

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