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Seafood restaurant chain Red Lobster filed for bankruptcy, succumbing to onerous leases, high labour costs and a disastrous unlimited shrimp promotion.
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The Orlando, Florida-based company filed for Chapter 11 protection on Sunday, listing assets and liabilities of US$1 billion to US$10 billion each in its bankruptcy petition. The filing allows the company to keep operating while it works out a plan to repay creditors.
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Red Lobster plans to hand control of the company to its lenders, led by Fortress Investment Group, who have agreed to provide US$100 million in financing to support the chain through bankruptcy. The takeover offer is in the form of a stalking horse bid, meaning it will set the…
