Red Lobster may file for bankruptcy by end of May: report

By Mike Murphy

Red Lobster is expected to file for bankruptcy by the end of the month, according to a new report, which came soon after the seafood restaurant chain abruptly closed dozens of locations.

The Wall Street Journal reported late Tuesday that a chapter 11 bankruptcy filing is expected before Memorial Day, and could come as soon as next week. Last month, Bloomberg News reported Red Lobster had hired advisers and was considering filing for bankruptcy, citing high costs of leases and labor.

According to the Journal report, Red Lobster faces hundreds of millions of dollars of debt and hopes the bankruptcy process will give it the opportunity to renegotiate with landlords and make a deal with creditors that will allow it to maintain operations.

On Monday, a restaurant liquidator said it was auctioning at least 48 Red Lobster locations, and everything inside them.

Red Lobster's website Tuesday indicated that 87 restaurants in 27 states have been "temporarily closed."

Red Lobster did not respond to a request for comment.

Thai Union Group (TH:TU), which owns a controlling stake in the company, said in a March financial statement that it was "actively engaged in negotiations with potential buyers," and said it hopes to sell its stake in the restaurant chain by the end of 2024.

-Mike Murphy

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05-14-24 1957ET

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