US seafood and casual dining chain Red Lobster has filed for Chapter 11 bankruptcy protection following the closure of several restaurant locations in the US.
In a statement, the company said it has been “working with vendors to ensure operations are unaffected” and has received a $100 million debtor-in-possession from its current lenders.
Red Lobster said it will use the proceedings to reduce locations and look for a buyer.
“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 lender,” said the company in a release.
The filing comes after the Florida-based chain abruptly closed dozens of US restaurants last week.
TAGeX Brands — a restaurant and food industry equipment auctioneer — announced it will be selling off items from some of the shuttered US stores.
On LinkedIn, TAGeX referred to the sale as “the largest restaurant liquidation EVER through its online auction marketplace.”
The chain has 27 locations in Canada, with restaurants in Alberta, Manitoba, Ontario, and Saskatchewan. Daily Hive previously reached out to Red Lobster for comment on the potential closures of its Canadian restaurants but did not receive a response.
Currently, all of Red Lobster’s Canadian locations are listed as “open” on its website.
The company said its remaining locations will remain open and operate “as usual” during the Chapter 11 process.
“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth,” said Jonathan Tibus, the company’s CEO, in a statement.
“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.”
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