Red Lobster Files for Bankruptcy After Closing Dozens of Locations

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Red Lobster has filed for Chapter 11 bankruptcy protection shortly after closing dozens of its restaurants. The seafood chain has been struggling with increasing lease and labor costs, compounded by promotions like its all-you-can-eat shrimp deal, which overwhelmed the chain financially and contributed to significant losses.

Related: Red Lobster Locations in Tampa Close Abruptly

The court filing reveals that Red Lobster has over 100,000 creditors and estimated assets and liabilities each ranging between $1 billion and $10 billion. CEO Jonathan Tibus, a corporate restructuring specialist who took the helm in March, signed the document.

Last week, TAGeX Brands, a restaurant liquidator, announced it would auction off equipment from more than 50 recently closed Red Lobster locations. These closures span over 20 states, reducing the chain’s presence in cities such as Denver, San Antonio, Indianapolis, and Sacramento.

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Red Lobster’s journey began in 1968 when Bill Darden and Charley Woodsby opened the first location in Lakeland, Florida. It quickly became successful, leading to its acquisition by General Mills two years later. The chain then expanded nationwide, becoming a household name in the seafood restaurant industry.

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