Red Lobster to Remain Open During Restructuring After Filing for Bankruptcy

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Last week, Red Lobster abruptly shuttered 48 of its restaurants across the country. Now, in a press release dated May 19, 2024, the well-known casual dining seafood chain has declared it has filed for Chapter 11 bankruptcy. This move comes after the 2023 debacle of their Ultimate Endless Shrimp promotion. While popular with diners, the promotion led to significant financial losses, costing Red Lobster a staggering $22 million in that year alone.

Despite the recent closure of 48 locations, Red Lobster remains the world's largest seafood restaurant chain, with approximately 650 locations still in operation. These restaurants will continue to operate as usual during the Chapter 11 bankruptcy proceedings. As Red Lobster works towards recovery, it has secured $100 million in debtor-in-possession (DIP) financing from its current lenders. Additionally, the company plans to raise further funds by auctioning off kitchen equipment from the nearly 50 closed restaurants.

Photo: Luke Sharrett/Bloomberg/Getty

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