Red Lobster files for bankruptcy after dozens of restaurant closures

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By Yosi Yahoudai
Founder and Managing Partner

Facing rising costs and an all-you-can-eat shrimp deal that backfired, Red Lobster has filed for Chapter 11 bankruptcy protection. 

The seafood restaurant chain said in a court filing late Sunday that it has more than 100,000 creditors and estimated assets between $1 billion and $10 billion, according to the Associated Press. The company’s estimated liabilities are between $1 billion and $10 billion.

The news comes days after the seafood chain closed dozens of U.S. restaurants, including at least five locations in both California and Florida, and four in both Maryland and Colorado. 

The bankruptcy petition was signed by CEO Jonathan Tibus, a corporate restructuring specialist who took the top post at Red Lobster in March.

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Red Lobster closing list

Restaurant liquidator TAGeX Brands announced last week that it would be auctioning off the equipment of over 50 Red Lobster locations that were recently closed. 

The store closures span across more than 20 states. Three restaurants are closing in Georgia, New York, Texas and Virginia, according to the online auction page. 

Other states with listed closures include Alabama, Idaho, Illinois, Indiana, Iowa, Michigan, Mississippi, New Jersey, North Dakota, Oklahoma, South Carolina, Washington, and Wisconsin. 

In total, Red Lobster has more than 700 locations worldwide, according to its website.

Alabama

    AuburnDecatur

    California

      ReddingRohnert ParkSacramentoSan DiegoTorrance

      Colorado

        DenverLakewoodLone TreeWheat Ridge

        Florida

          Altamonte SpringsGainsevilleHialeahLargoOrlando

          Georgia

            AthensRoswellDublin

            Idaho

            Illinois

              BloomingdaleDanville

              Indiana

                IndianapolisElkhart

                Iowa

                  Council BluffsWaterloo

                  Maryland

                    GaithersburgColumbiaSilver SpringLaurel

                    Michigan

                      Fort Gratiot

                      Mississippi

                        D’lberville

                        New York

                          AmherstKingstonRochester

                          New Jersey

                          North Dakota

                            Grand Forks

                            Oklahoma

                            South Carolina

                              Myrtle Beach

                              Texas

                                Lake JacksonLongviewSan Antonio

                                Virginia

                                  Colonial HeightsWilliamsburgNewport News

                                  Washington

                                    Silverdale

                                    Wisconsin

                                      WauwatosaLa Crosse

                                      LINK: Click here for a list of Red Lobster closures by state on TAGeX Brands auction information page. 

                                      Red Lobster’s financial woes

                                      Red Lobster has been struggling with rising lease and labor costs in recent years, as well as promotions like its iconic shrimp deal that backfired.

                                      Red Lobster’s recent “Ultimate Endless Shrimp” fiasco, in which the chain made the normally-limited promotion a permanent offering in June 2023, overwhelmed restaurants – and reportedly contributed to millions in losses.

                                      Maintaining stability at the Florida chain has also been problematic due to multiple ownership changes over its 56-year history. Earlier this year, Red Lobster co-owner Thai Union Group, one of the world’s largest seafood suppliers, announced its intention to exit its minority investment in the dining chain.

                                      Thai Union first invested in Red Lobster in 2016 and upped its stake in 2020. At the time of the January announcement on its plans to divest, CEO Thiraphong Chansiri said the COVID-19 pandemic, industry headwinds and rising operating costs had hit the dining chain hard and caused “prolonged negative financial contributions to Thai Union and its shareholders.”

                                      For the first nine months of 2023, the Thai company reported a $19 million share of loss from Red Lobster.

                                      Red Lobster’s roots date back to 1968, when the first restaurant opened in Lakeland, Florida.

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                                      About the Author
                                      Yosi Yahoudai is a founder and the managing partner of J&Y. His practice is comprised primarily of cases involving automobile and motorcycle accidents, but he also represents people in premises liability lawsuits, including suits alleging dangerous conditions of public property, third-party criminal conduct, and intentional torts. He also has expertise in cases involving product defects, dog bites, elder abuse, and sexual assault. He earned his Bachelor of Arts from the University of California and is admitted to practice in all California State Courts, and the United States District Court for the Southern District of California. If you have any questions about this article, you can contact Yosi by clicking here.