The seafood restaurant chain Red Lobster is reportedly exploring a bankruptcy filing.
Red Lobster has 649 restaurants, primarily in the U.S. and Canada. According to a Bloomberg News report sourced from unnamed “people with knowledge of the matter,” the chain is in discussions with the law firm King & Spalding on how to proceed while it faces financial challenges created by the costs of property leases and labor expenses. A Chapter 11 bankruptcy would enable the company to continue with its operations while a debt restructuring plan was created.
The chain was founded in 1968 and has undergone different owners over the years. Thai Union Group acquired the chain in 2020, but earlier this year it announced plans to exit its investment in Red Lobster and take a write off because the chain’s “ongoing financial requirements no longer align with Thai Union’s capital allocation priorities.”
Last month, Red Lobster replaced CEO Horace Dawson with Jonathan Tibus, managing director of Atlanta-headquartered management consulting firm Alvarez & Marsal and an expert in restaurant restructuring and performance improvement strategies.
