Restaurant chain Red Lobster announced Sunday that it has filed for Chapter 11 bankruptcy. The news comes after the all-you-can-eat service was reported to have caused a financial crisis.
NBC News report On Monday, the restaurant said it was “pursuing operational improvements, simplifying our operations by reducing the number of locations, and pursuing the sale of substantially all of our assets as a going concern.”
The company plans to sell the business to an entity owned by the lender after receiving a $100 million loan commitment from the lender to continue operations.
Red Lobster recently announced it would close 100 stores across the United States. A Breitbart News article published Tuesday lists Alabama, Colorado, Georgia, California and Florida as some of the areas targeted for closure.
Neal Sherman, CEO and founder of TAGeX Brands, announced in a LinkedIn post on Monday that his company will host the “largest restaurant liquidation” through an online auction. The TAGex website listed an auction for 48 closed Red Lobster stores across the United States, with kitchenware and furniture from the stores scheduled to be auctioned off.
The restaurants that have closed include Red Lobster locations in La Crosse, Wisconsin, Watertown, New York, Gaithersburg, Maryland, and Bloomingdale and Danville, Illinois.
According to a report from NBC, the company said that its stores that have not been closed will remain open as the bankruptcy proceedings proceed.
“Founded in 1968, Red Lobster grew to nearly 700 stores by 2019. However, it was unable to regain its footing after the pandemic. From 2019 to 2023, U.S. sales The privately held company has since struggled with its debt burden and is also behind on payments to vendors,” the company said.
Breitbart News reported in April that Red Lobster was considering filing for bankruptcy after its all-you-can-eat shrimp service suffered $11 million in losses in 2023.
“The company’s $20 shrimp promotion comes after it experienced a $5.4 million loss in the second quarter of 2023, but the deal was so well received by customers that it was miserably linked to increased profits. We failed,” the outlet store said.
video footage show According to Inside Edition, people were eating shrimp on their plates one after another, and one woman said her goal was to eat 65 shrimp at once.
But when the magazine’s reporters went to Red Lobster in New York City, they discovered that the all-you-can-eat shrimp menu was only available on Mondays.
