Bloomberg: Red Lobster Considering Bankruptcy Filing

Bloomberg News reports:

Seafood restaurant chain Red Lobster is mulling a Chapter 11 bankruptcy filing as it looks to restructure its debt, according to people with knowledge of the matter.

Red Lobster has been getting advice from law firm King & Spalding, said the people, who asked not to be identified discussing a private matter. The dining chain is considering a possible Chapter 11 filing to shed some long-term contracts and renegotiate a swath of leases, the people said.

Red Lobster’s cash flows have been weighed down by onerous leases and labor costs, among other issues. Restructuring discussions are ongoing and a final decision hasn’t been made, they said. Filing for bankruptcy would allow the company to keep operating while it works on a debt-cutting plan.

Read the full article. Some outlets are pointing to Red Lobster’s recent $11 million loss resulting from its “endless shrimp” promotion.

Seafood restaurant chain Red Lobster is considering a Chapter 11 bankruptcy filing, sources say https://t.co/hv2FqWSW0R

— Bloomberg (@business) April 16, 2024