Red Lobster Files For Bankruptcy: What Does This Mean For Texas?

The 56-year-old chain made the filing late Sunday, days after shuttering dozens of restaurants.

Red Lobster Management LLC, along with its direct and indirect operating subsidiaries, owner and operator of the Red Lobster® restaurant chain, today announced that the Company has voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida.

The Company intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern. As part of these filings, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders.

The company will also receive $100 million in debtor-in-possession financing from its existing lenders.
"The support we've received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests," CEO Jonathan Tibus said in a statement.

Red Lobster said it planned to reduce its locations as it prepared to sell most of its assets. In the meantime, surviving Red Lobster restaurants will remain open.

I spoke with the location in Lubbock and they say they will remain open as of today, May 20th, 2024. That is all they were allowed to say but as of now they are not affected.

This all comes after announcing it will close 87 locations across 27 states in the US back at the beginning of the month.