Red Lobster is weighing a Chapter 11 bankruptcy filing to renegotiate leases, address long-term contracts, and reduce rising labor costs. The seafood restaurant chain is being advised by law firm King & Spalding on the matter.
Red Lobster is reportedly considering filing for bankruptcy to relieve financial pressures that have weighed on the company. According to a report by Bloomberg citing people familiar with the discussions, Red Lobster is weighing a Chapter 11 bankruptcy filing to renegotiate burdensome leases and address other long-term contracts as well as rising labor costs .
Darden Restaurants sold Red Lobster to Golden Gate Capital in 2014. Thai Union, which previously had a one-fourth stake in the company, bought out Golden Gate's stake in the company in 2021. Earlier this year, Thai Union announced it was planning to exit its investment in Red Lobster and take a write off after announcing in a regulatory filing that the restaurant chain's "ongoing financial requirements no longer align with Thai Union's capital allocation priorities.
Red Lobster Bankruptcy Financial Pressures Chapter 11 Leases Long-Term Contracts Labor Costs Debt Reduction
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