Red Lobster Says Locations Will Stay Open After Filing For Bankruptcy

Red Lobster Says , Locations Will Stay Open , After Filing For Bankruptcy.
On May 19, Red Lobster confirmed in
a statement that the company has filed for
voluntary Chapter 11 bankruptcy in Florida. .
NBC reports that the largest seafood chain in
the United States said that filing for Chapter 11 will , "drive operational improvements, simplify the business
through a reduction in locations, and pursue a sale
of substantially all of its assets as a going concern.".
In a so-called stalking horse arrangement, Red Lobster
will sell the entire business to a new entity that is
completely owned and controlled by lenders. .
According to the company, lenders have
provided $100 million in financial commitments
to fund the chain's ongoing operations.
According to the company, lenders have
provided $100 million in financial commitments
to fund the chain's ongoing operations.
NBC reports that the company's bankruptcy
petition lists Red Lobster's assets at a value
between $1 billion and $10 billion.
The chain stressed that despite closing around
99 locations across the U.S., remaining locations
will remain open during the bankruptcy process.
The company added that it has been , "working with vendors to ensure
that operations are unaffected.".
This restructuring is the best path
forward for Red Lobster. It allows
us to address several financial and
operational challenges and emerge
stronger and re-focused on our growth, Jonathan Tibus, Red Lobster CEO, via NBC.
The 56-year-old chain was founded back in 1968.
By 2019, Red Lobster had expanded to include
nearly 700 locations across the country.
NBC reports that the company has struggled
under a growing debt load after failing to regain
a foothold following the COVID-19 pandemic.