One of America’s favorite fast casual restaurants famous for its “endless” promotions may be ending.
On Tuesday, Bloomberg reported that Red Lobster is close to filing for Chapter 11 bankruptcy as a part of a larger restructuring plan to work through debt and relieve the company of leases and contractual agreements, citing anonymous people close to the matter.
The Chapter 11 filing would allow Red Lobster to keep operations running while financials and debt restructuring are negotiated behind closed doors, though no final decisions have been made.
Related: Red Lobster CEO Resigns After Only 8 Months
Red Lobster is reportedly working with the law firm King & Spalding to assess the next steps.
The seafood chain has gone through a slew of different private owners since it was established in 1968.
In the summer of 2014, the chain was acquired by Golden Gate Capital after being purchased from Darden Restaurants, which also oversees Olive Garden and Longhorn Steakhouse.
Seafood supply company Thai Union purchased a 25% stake in Red Lobster in 2016 for an estimated $575 million before buying the remaining 75% from Golden Gate Capital in 2020.
Earlier this year, Red Lobster rolled out an “Endless Lobster Experience” where 150 customers won a two-hour complimentary feast of unlimited lobster, two sides, and Cheddar Bay Biscuits — the deal sold out almost immediately.
But in November 2023, Red Lobster launched a $20 “Endless Shrimp” promotion that proved to be too popular, costing the company $11 million.
The chain is coming off a rough Q4 2023, where it lost an estimated $12.5 million in operating revenue.
“Red Lobster is done and over with,” Thai Union Group CEO Chansiri said earlier this year regarding the company’s plan to exit its stake in Red Lobster. “[We’re] just waiting for the sale to happen, but we do not expect any significant value to be gained.”
