Restaurants

Red Lobster cleared to exit Chapter 11 bankruptcy

The company, known for its seafood offerings and cheddar biscuits, filed for bankruptcy protection in May.

The exterior of a Red Lobster restaurant on May 20, 2024 in Austin, Texas. 
Brandon Bell | Getty Images

The exterior of a Red Lobster restaurant on May 20, 2024 in Austin, Texas. 

  • Red Lobster is one step closer to exiting Chapter 11 bankruptcy after a court approved its restructuring plan.
  • A group of investors under the name RL Investor Holdings will acquire Red Lobster by the end of the month.
  • At least nine other restaurant chains have filed for bankruptcy this year.

A bankruptcy court approved Red Lobster's plan to exit Chapter 11, putting the seafood chain one step closer to exiting bankruptcy.

Watch NBC6 free wherever you are

>
Watch button  WATCH HERE

The company, known for its seafood offerings and cheddar biscuits, filed for bankruptcy protection in May. Red Lobster had struggled with increased competition, expensive leases, last year's disastrous shrimp promotion and a broader pullback in consumer spending.

As part of the restructuring plan, a group of investors under the name RL Investor Holdings will acquire Red Lobster by the end of the month. Once the acquisition closes, former P.F. Chang's CEO Damola Adamolekun will step in to lead Red Lobster. Current CEO Jonathan Tibus, who led the company through bankruptcy, will leave Red Lobster.

Get local news you need to know to start your day with NBC 6's News Headlines newsletter.

>
Newsletter button  SIGN UP

"This is a great day for Red Lobster," Adamolekun said in a statement. "With our new backers, we have a comprehensive and long-term investment plan – including a commitment of more than $60 million in new funding – that will help to reinvigorate the iconic brand while keeping 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 across the U.S. and Canada.

At least nine other restaurant chains have filed for bankruptcy this year. High interest rates and a pullback in consumer spending have weighed on eateries, particularly if they were already struggling to bounce back from the pandemic.

Copyright CNBC
Contact Us