Red Lobster Management LLC and affiliated companies filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Middle District of Florida on Sunday.
The cases have been assigned to judge Grace E. Robson.
The move had been predicted for weeks following the Orlando, Fla.-based chain’s hiring of restructuring expert Jonathan Tibus in March.
In a press release, the company, which operates nearly 600 Red Lobster casual-dining restaurants across the country, said it would use the protection to “drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.”
The chain closed around 90 restaurants last week, and the assets of dozens of them were put up for auction.
As part of the filing the company said it had entered into a stalking horse purchase agreement with its lenders.
The company said those restaurants that are still open will continue operations as the bankruptcy proceeds. It added that it has received $100 million in debtor-in-possession financing commitment from its existing lenders.
“This restructuring is the best path forward for Red Lobster,” Tibus said in the release. “It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth. The support we've received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”
King & Spalding LLP, Berger Singerman LLP, and Blake, Cassel & Graydon LLC are serving as legal advisors. Alvarez & Marsal is serving as financial advisor and providing corporate leadership as chief executive and chief restructuring officers. Hilco Corporate Finance is serving as mergers & acquisition advisor, and Keen-Summit is serving as real estate advisor.
Contact Bret Thorn at [email protected]