Does Red Lobster Have Bankruptcy on the Brain?
The beloved Red Lobster restaurant chain is now considering initiating Chapter 11 bankruptcy to control and alleviate the burden of its current debts.
Due to their existing personnel expenses and leases, the restaurant has struggled to make a profit. Currently, they are consulting with King & Spalding, a commercial law company, to determine how to restructure and reduce expenses.
Red Lobster has not yet decided whether to file for bankruptcy, but they have stated that such action would enable them to keep running their company. Meanwhile, they are working out their next course of action, which may involve renegotiating some leases and terminating some contracts.
Yall… say it ain’t so….Red Lobster is filing for Bankruptcy?? pic.twitter.com/QfUFAyjo5Y
— Corey Ryan Forrester First of His Name (@CoreyRForrester) April 17, 2024
This occurs in the midst of the restaurant’s challenging financial circumstances. Despite advertising its endless shrimp promotion, it reported an operational deficit of $12.5 million in the fourth quarter of 2023.
Moreover, Red Lobster has been attempting to garner attention for the last several months. In February, the restaurant announced that, in commemoration of its yearly Lobsterfest, it would provide a complimentary feast of unlimited lobster to a limited number of patrons.
In addition, the restaurant business also promoted that it would grant 150 winners nationwide a complimentary two-hour supper comprising unlimited lobster, two side dishes, and the chain’s well-known cheddar biscuits as part of the inaugural Unlimited Lobster Experience.
According to the restaurant’s website and Bloomberg, Bill Darden founded the restaurant in 1968 in Lakeland, Florida. Darden Restaurants assisted in expanding the chain to multiple sites across the United States before Golden Gate Capital acquired the business in 2014. Later, Thai Union Group Plc took over the company after the COVID-19 outbreak.
If Red Lobster goes under, I’ll be raising capital to buy the rights to their cheddar biscuits.
— Governor Dill (@TheGreenOldDill) April 18, 2024
Who wants in?
Facing considerable financial challenges due to mounting operational costs and fluctuating market demands, the restaurant strategically revamped its pricing structure in June. As part of this initiative, the beloved never-ending shrimp deal experienced a notable price hike from $20 to $25, prompting loyal patrons to understandably reevaluate and adjust their dining habits accordingly.
