Red Lobster Restructuring Approved

By Dietrich Knauth
NEW YORK (Reuters) – Restaurant chain Red Lobster on Thursday received court approval for a restructuring plan that will enable the company to emerge from bankruptcy, now under the ownership of a Fortress Investment Group-led coalition of lenders.

Key Points

• Red Lobster will keep all 544 current locations open, preserving jobs for 30,000 employees.
• The company, based in Orlando, Florida, operates in 44 U.S. states and four Canadian provinces.
• Before filing for bankruptcy, Red Lobster closed 93 locations.
• The new CEO, Damola Adamolekun, announced that the company’s new owners have committed over $60 million to “reinvigorate the iconic brand.”

“This is a great day for Red Lobster,” Adamolekun stated.

Bankruptcy Details

• Red Lobster filed for bankruptcy in May to address its $300 million debt and sought a buyer.
• With no outside bidders appearing, they opted for a transaction that would transfer control to its lenders in a debt-cancellation deal.
• The company reported a $76 million net loss in 2023, attributing its bankruptcy to high inflation, unsustainable rent costs, and poor management decisions, including an “endless shrimp” promotion that resulted in $11 million in losses.