The seafood restaurant company is getting closer to emerging from bankruptcy after a bankruptcy judge granted Red Lobster’s bid to exit Chapter 11.
The business, which is well-known for its seafood selection and cheddar biscuits, declared bankruptcy in May.
Increased competition, pricey leases, the failed shrimp campaign from the previous year, and a general decline in consumer spending had all been challenges for Red Lobster.
Red Lobster will be acquired by a group of investors under the name RL Investor Holdings before the end of the month as part of the restructuring plan. Damola Adamolekun, a former CEO of P.F. Chang’s, will take over as Red Lobster’s leader when the deal complete. Red Lobster’s current CEO, Jonathan Tibus, who guided the business through bankruptcy, is leaving the position.
“Red Lobster is having a great day today,” Adamolekun declared in a statement. “With the support of our new supporters, we have a thorough and long-term investment plan that will help to revitalize the iconic brand while preserving the best aspects of its history. This plan includes a commitment of more than $60 million in new funding.”
TCW Private Credit, Blue Torch, and funds administered by Fortress Investment Group affiliates are all part of RL Investor Holdings. Red Lobster is going to run its own business.
The business now has 544 restaurants in the United States and Canada after cutting back on the number of locations it owned.
This year, at least nine other restaurant chains have declared bankruptcy. Restaurants have been negatively impacted by high borrowing rates and a decline in customer spending, especially if they were already having trouble recovering from the epidemic.
