Red Lobster Exits Chapter 11 Bankruptcy Protection

Red Lobster has emerged from Chapter 11 bankruptcy after a court approved its restructuring and new ownership under an investment group organized by Fortress Investment Group.

The Orlando, Fla.-based national seafood chain said its exit from bankruptcy protection will allow it to keep all of its 544 locations open and protect the jobs of 30,000 employees.

"Red Lobster is now stronger, more resilient, and ready for a bright new chapter, supported by our loyal guests, dedicated team members, and new USA-based ownership who are committed to investing in Red Lobster's future," the company said Wednesday on X.

The company filed for bankruptcy in May after it reported losing $12.5 million during the fourth quarter of 2023, which followed an $11 million third-quarter loss.

It said its liabilities were between $1 billion and $10 billion.

Last month, Red Lobster named a new CEO, Damola Adamolekun, the former chief executive at P.F. Chang's.

In a statement after receiving the court's approval earlier this month, Adamolekun said the company's new owners have 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."

"This is a great day for Red Lobster," he said.

The company cited a number of reasons for its bankruptcy, including falling sales, a decline in its customer base, rising labor costs, and the financial consequences of its $20 "Ultimate Endless Shrimp" promotion.