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Red Lobster sought to reassure customers that filing for Chapter 11 bankruptcy would not mean it would go out of business.
The company issued a statement Tuesday acknowledging its current financial difficulties and stressing that its legal restructuring will allow it to strengthen its remaining restaurant locations.
“Bankruptcy is a term that can be easily misunderstood,” Red Lobster’s public relations team said in a statement posted on social media. “Filing for bankruptcy does not mean we are going out of business; in fact, it means quite the opposite. It’s a legal process that allows us to make changes.”The company will continue to move forward. ”
The statement continued, “As many of you know, we recently made the difficult decision to close many of our restaurants. Some of the leading brands have adopted this same process to protect their futures and profits.” Their customers have supported them and cheered them on. And because of it they became stronger. ”
Red Lobster files for bankruptcy; blame focuses on shrimp trade
Red Lobster Restaurant is located in Leesburg, Florida. (Stephen M. Dowell/Orlando Sentinel/Tribune News Service via Getty Images/Getty Images)
An announcement earlier this month indicated that the company plans to “auction at more than 50 locations nationwide.”
Restaurant liquidation company TageX Brands announced it would oversee the sale of equipment from each closing location, calling the auction “the largest restaurant equipment auction ever.” Only 48 of his stores were specifically listed in the catalog.
Red Lobster filed for Chapter 11 bankruptcy protection in a Florida court late Sunday night, saying it would “use the process to improve its operations.”
Red Lobster’s Ultimate Endless Shrimp Deal Contributes to Third Quarter Operating Loss
A “Closed” sign is posted in the window of a closed Red Lobster restaurant in Torrance, California. Red Lobster’s website lists dozens of Red Lobster locations as “temporarily closed,” while “more than 50” locations remain operational. (Patrick T. Fallon/AFP via Getty Images/Getty Images)
The chain said it has a $100 million loan commitment from existing lenders and that its remaining restaurants will remain open during the bankruptcy process.
“Together, we have much worth supporting. We have made delicious, high-quality seafood available for generations,” Tuesday’s statement read. ing. “Many of you tried lobster for the first time in our restaurant. We’ve been serving you Lobster Fest and Crab Fest for years. And of course, no meal would be complete without a Cheddar Bay biscuit. It’s not finished. We’re here and ready to continue making memories with you.” ”
In response to the pandemic, Red Lobster tried to increase foot traffic to its restaurants by offering a $20 all-you-can-eat shrimp plan, hoping to act as a loss leader and bring in more patrons.
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Red Lobster’s famous Cheddar Bay Biscuits are served at a restaurant in Alexandria, Virginia. (Deb Lindsey of The Washington Post via Getty Images/Getty Images)
However, the deal itself turned out to be too good for customers to pass up. of The Los Angeles Times reported. Some patrons have bragged on social media about how many shrimp they’ve eaten, including one woman who said she ate 108 shrimp in a four-hour meal.
“Please join us. Dine with us. Support us. Let’s write a new chapter together,” Red Lobster told customers via social media.
FOX Business’ Eric Revell contributed to this report.
