By Dietrich Knauth
NEW YORK (Reuters) – Restaurant chain Red Lobster on Thursday received court approval for a restructuring that will allow the company to emerge from bankruptcy under the ownership of a Fortress Investment Group-led coalition of lenders.
Red Lobster said the restructuring will allow it to keep all 544 current locations open and preserve jobs for 30,000 employees.
The Orlando, Florida-based company, which operates in 44 U.S. states and four Canadian provinces, closed 93 locations before filing for bankruptcy.
Red Lobster’s next CEO, Damola Adamolekun, said the company’s new owners have committed more than $60 million in additional funding to “reinvigorate the iconic brand.”
“This is a great day for Red Lobster,” Adamolekun said in a statement.
Red Lobster filed for bankruptcy in May, seeking to address its $300 million debt and find a buyer. When no outside bidder emerged, the company chose to move forward with a transaction that would hand control to its lenders in a debt-cancellation deal.
Red Lobster posted a $76 million net loss in 2023 and blamed its bankruptcy on high inflation, unsustainable rent costs, and poor management decisions including an “endless shrimp” promotion that caused $11 million in losses.