Home » Red Lobster Considers Chapter 11 Bankruptcy: What You Need to Know

Red Lobster Considers Chapter 11 Bankruptcy: What You Need to Know

by admin
Red Lobster Considers Chapter 11 Bankruptcy: What You Need to Know

Red Lobster, a popular seafood restaurant chain, is reportedly considering filing for Chapter 11 bankruptcy as part of its efforts to restructure its debt. According to several international media outlets, the management of the chain has been seeking advice on this matter from the King & Spalding law firm.

The potential bankruptcy filing includes considerations such as getting rid of long-term contracts and renegotiating leases in order to address issues such as onerous leases and labor costs that have impacted Red Lobster’s cash flows. The restructuring discussions are still ongoing, and a final decision has not yet been made.

If Red Lobster does file for bankruptcy, it would allow the company to continue operations while working on a debt reduction plan. The last Red Lobster restaurant in Puerto Rico closed its doors in May 2023.

In the world of bankruptcy, the different numerals of the chapters of the Bankruptcy Code have specific meanings. For example, Chapter 7 involves the liquidation of property, Chapter 11 is known as the reorganization chapter, and Chapter 13 refers to the reorganization of debts for individuals with regular income and debts below certain limits. Creditors have specific rights and procedures under each chapter.

As Red Lobster evaluates its options, it remains to be seen how the potential bankruptcy filing will impact the chain and its operations moving forward. Stay tuned for updates on this developing story.

See also  Food - Union continues to demand low sales tax for gastronomy

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy