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Red Lobster considering bankruptcy filing: report

red lobster is reportedly considering filing for bankruptcy to ease the financial pressures on the company.

according to Bloomberg reporting Red Lobster is considering filing for Chapter 11 bankruptcy protection to deal with burdensome lease renegotiations, other long-term contracts and rising labor costs, people familiar with the discussions said.

The newspaper reported that the seafood restaurant chain was being advised on the matter by law firm King & Spalding, and that restructuring discussions were ongoing and a final decision on restructuring had not yet been made. . bankruptcy filing.

Filing for Chapter 11 will allow the company to work with creditors and investors to develop a plan to reduce debt while continuing to operate and move into the future on better financial footing.

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Red Lobster is reportedly considering filing for Chapter 11 bankruptcy to restructure its finances and business. (Victor J. Blue/Bloomberg via Getty Images/Getty Images)

Red Lobster did not respond to a request for comment.

of seafood chain Founded in 1968 by Bill Darden and Charlie Woodsby, the company has had various owners and major investors since.

General Mills acquired the company in 1970, helped it rapidly expand throughout the United States and Canada, and then spun it off as an independent, publicly traded company. Darden Restaurants More than 20 years have passed since then.

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red lobster exterior

Red Lobster was founded in 1968. (Luke Charette/Bloomberg via Getty Images/Getty Images)

Darden Restaurants sold Red Lobster to Golden Gate Capital in 2014. Thai Union, which previously held a quarter of the company’s shares, bought Golden Gate’s stake in the company in 2021.

Thai Union walked away from its investment in Red Lobster earlier this year after announcing in a regulatory filing that the restaurant chain’s “ongoing financial requirements are no longer consistent with Thai Union’s capital allocation priorities.” They announced plans to withdraw and write off the company.

red lobster seafood restaurant

Last month, Red Lobster hired a new CEO focused on restaurant restructuring and performance improvement plans. (Don & Melinda Crawford/Education Images/Universal Images Group via Getty Images/Getty Images)

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Red Lobster has hired Jonathan Tibbs as its president. new CEO last month. Tibus is considered an expert in developing and executing turnaround plans for underperforming restaurant, retail and hospitality companies and has led numerous turnaround efforts.

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