January 1, Popular Restaurant Chain Files for Bankruptcy

Red Lobster, the popular restaurant chain, has filed for Chapter 11 bankruptcy, following recent financial troubles. According to NBC News, the company aims to “drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.”

The chain recently announced the closure of 100 locations across the United States. States affected include Alabama, Colorado, Georgia, California, and Florida.

Neal Sherman, CEO and Founder of TAGeX Brands, revealed in a LinkedIn post that his company would be hosting “the largest restaurant liquidation” through an online auction. The TAGex website listed auctions for 48 Red Lobster locations throughout the U.S. that had been closed, offering kitchen items and furniture from these locations.

Among the closed restaurants are those in La Crosse, Wisconsin, Watertown, New York, Gaithersburg, Maryland, and Bloomingdale and Danville, Illinois. The company confirmed that locations not yet closed will remain open as the bankruptcy process continues, according to the NBC report.

Established in 1968, Red Lobster had expanded to nearly 700 locations by 2019. However, it struggled to recover after the pandemic, with U.S. sales falling 13% between 2019 and 2023. The privately held company has since grappled with debt and disrupted vendor payments.

In April, it was reported that Red Lobster was contemplating bankruptcy after its all-you-can-eat shrimp promotion led to an $11 million loss in 2023. The campaign came after a $5.4 million loss in Q2 of 2023 but failed to boost profits due to its immense popularity among customers.

Inside Edition shared video footage of people consuming plate after plate of shrimp, with one woman aiming to eat 65 in one sitting. However, a reporter for the outlet noted that the all-you-can-eat shrimp deal was only being offered on Mondays at a New York City Red Lobster location.

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