Red Lobster is considering filing for Chapter 11 bankruptcy, according to a report.
The seafood chain is considering a Chapter 11 bankruptcy filing as it looks to restructure its debt, according to a Bloomberg News report citing people with knowledge of the matter.
The chain is looking to rid itself of some long-term contracts and renegotiate leases, but the company hasn’t made a final decision, Bloomberg reported.
Chapter 11 bankruptcy provides businesses or large investors with protection from creditors while they continue operating and develop a repayment plan. Both creditors and owners must agree on a reorganization plan, which ultimately must be approved by a federal bankruptcy judge. Red Lobster would be able to continue operating during Chapter 11 bankruptcy.
Red Lobster opened its first restaurant in 1968 in Florida. The chain has more than 30 restaurants In Pennsylvania.
Several large chains have filed for bankruptcy in the past year including JoAnn Fabrics, Rite Aid, Christmas Tree Shops, David’s Bridal, Soft Surroundings, and Bed, Bath & Beyond. Christmas Tree Shops, Soft Surroundings, and Bed, Bath & Beyond closed. Overstock.com purchased the Bed, Bath & Beyond name and rebranded to Bed, Bath & Beyond.
