Red Lobster clarifies shut-down rumors after company files for bankruptcy

red lobster clarifies shut-down rumors after company files for bankruptcy

Red Lobster has filed for Chapter 11 bankruptcy

Red Lobster has cleared up rumors that it is closing after the company filed for Chapter 11 bankruptcy. Rumors have been swirling that the popular restaurant chain would shut its doors after the filing.

Earlier this week, the company said it had more than $1 billion in debt and less than $30 million in cash on hand. Red Lobster will sell its business to its lenders to receive finances to stay afloat.

The company shared a statement on social media, dispelling rumors that there are plans for its restaurants to close. "Filing for bankruptcy does not mean we are going out of business," the statement reads.

"In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost structure so that Red Lobster can continue as a stronger company going forward."

The truth is, some of the world's most beloved brands like Delta and Hertz have used this same process to protect their futures and their customers stood with them and rooted them on. And because of that, they emerged stronger.

"Together, we have a lot worth rooting for. We've made delicious, high-quality seafood accessible for generations."

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The bankruptcy announcement came after the company closed 48 of its restaurants across the United States. Red Lobster currently has 578 restaurants across 44 states and Canada and serves 64 million customers a year, reports CNN.

In the first nine months of 2023, Red Lobster reported a share loss of $19 million. It attributed $11 million of this loss to the “Ultimate Endless Shrimp” promotion it introduced to customers.

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