The exterior of a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
Brandon Bell | Getty Images
A bankruptcy court has approved Red Lobster's plan to emerge from Chapter 11, bringing the seafood chain one step closer to resolving its bankruptcy.
The company, known for its seafood offerings and cheddar biscuits, filed for bankruptcy protection in May. Red Lobster has struggled with increased competition, expensive leases, last year’s disastrous shrimp promotion and a broader downturn in consumer spending.
As part of the restructuring plan, a group of investors called RL Investor Holdings will acquire Red Lobster by the end of this month. Once the acquisition is completed, former PF Chang CEO Damola Adamolekun will lead Red Lobster. Current CEO Jonathan Tibus, who led the company through bankruptcy, will leave Red Lobster.
“This is a tremendous day for Red Lobster,” Adamolekun said in a statement. “With our new backers, we have a comprehensive, long-term investment plan — including a commitment of more than $60 million in new funding — that will help revitalize the iconic brand while preserving the best of its history.”
RL Investor Holdings includes TCW Private Credit, Blue Torch and funds managed by affiliates of Fortress Investment Group. Red Lobster will operate as an independent company.
After slimming down its restaurant portfolio, the chain currently operates 544 restaurants in the US and Canada.
At least nine other restaurant chains have filed for bankruptcy protection this year. High interest rates and a slump in consumer spending have weighed on eateries, especially those already struggling to recover from the Covid-19 pandemic.
