Red Lobster, the seafood chain known for its Cheddar Bay biscuits and endless shrimp deals, has filed for bankruptcy protection after months of financial woes and store closures. On May 19, Red Lobster Management LLC, which owns the restaurant chain, it has voluntarily filed for relief under Chapter 11 bankruptcy in the United States Bankruptcy Court for the Middle District of Florida. As part of the filings, Red Lobster says it plans to remain open and sell its businesses to existing lenders.
According to , Red Lobster reports at least $1 billion in debt. Though, the announcement notes the company has been working with vendors to ensure its operations aren’t affected. The struggling chain has received a $100 million financing commitment from existing lenders in order to satisfy creditors while continuing to operate its businesses.
Representatives for Red Lobster did not immediately respond to TODAY.com’s request for comment. Still, the announcement states the company plans to “simplify the business through a reduction in locations” and plans on selling “substantially all of its assets,” which means more location closings may soon be on the horizon.
“This restructuring is the best path forward for Red Lobster,” Jonathan Tibus, CEO of Red Lobster, said in a press release. “It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth. The support we’ve received from our lenders and vendors will help en.
