Red Lobster is at risk of closing 135 more restaurants if it can’t renegotiate lease terms, according to bankruptcy documents filed last week.
The filing lists 228 rejected lease agreements that the company warned would result in losses if continued without adjustments. According to Restaurant Business.
The list of rejected leases includes several of the 93 Red Lobster locations that abruptly closed on May 13.
Court documents indicate that about 135 Red Lobster locations are at risk of closing, according to the publication.
The Post has reached out to Red Lobster for comment.
Last week, The Post reported that Red Lobster was working to keep its Times Square restaurant open.
The seafood chain has just a few weeks left to renegotiate the terms of its lease with its landlord, which expires at the end of this month.
SL Green and RXR, which own the property at 5 Times Square, are looking to double rental income from the restaurant, The Washington Post reported last week.
If Red Lobster wants to stay open in Times Square, it will have to pay $2.2 million a year in rent for the three-story, 16,482-square-foot space.
A real estate broker, who asked not to be named, told The Washington Post that Red Lobster may currently be paying less than $1 million a year for the location on the corner of West 41st Street and Broadway.
Red Lobster, which filed for Chapter 11 bankruptcy protection in Florida on May 19, is investigating the role played by its largest shareholder, Thai Union, in the restaurant chain’s “Endless Shrimp” promotion, which caused an $11 million loss, court documents said.
Red Lobster said the debacle was part of mismanagement by a global seafood company that owns most of the company and supplies shrimp to its restaurants.
Red Lobster, which operates about 550 casual dining restaurants in the United States, was offering a $20 all-you-can-eat shrimp deal as a limited-time promotion.
Former CEO Paul Kenny made it a permanent option for the year in May 2023, despite “significant opposition” from other executives, according to the document.
Some Red Lobster locations soon faced severe shrimp shortages around the same time the company eliminated two breaded shrimp suppliers and its exclusive contract with Thai Union led to higher costs, current CEO Jonathan Tibs wrote in the filing.
“Thai Union exerted significant influence over the company’s shrimp purchases,” Tibs wrote. “The Debtors are currently investigating the circumstances surrounding these decisions.”
Thai Union did not immediately respond to a request for comment.
Saddled with $294 million in debt, Red Lobster plans to close underperforming restaurants and sell the rest to a group of lenders that includes Fortress Investment Group.
Red Lobster, based in Orlando, Florida, is one of the world’s largest seafood restaurant chains, with 54 stores outside the United States and approximately 36,000 employees.
The company buys 20 percent of North American lobster tails and 16 percent of the lobsters sold worldwide, according to the filing.
Red Lobster said its business has been hurt by poor management decisions, high inflation, unsustainable rents and increased competition.
The company forecast a net loss of $76 million for 2023.
With post wire
