Casual dining chain, Red Lobster Hospitality, LLC has filed for Chapter 11 bankruptcy in an attempt to remain operational.  Lenders have apparently committed $100 million in debtor-in-possession financing to keep the company afloat.  The restaurant endured a number of reverses in the past two decades as a result of mismanagement through successive changes in ownership.

Red Lobster was established by entrepreneurs Bill Darden and Charley Woodsby in 1968 and was acquired in 1970 by General Mills.  In 1995 Red Lobster along with Olive Garden and three other chains were spun off as Darden Restaurants, Inc.  Following shareholder pressure, underperforming Red Lobster was divested by Darden Restaurants and was acquired by Golden Gate Capital for $2.1 billion in 2014.  In 2016, Thai Union, a cooperative seafood harvester and processor, acquired a 25 percent stake and in 2020 became the sole owner.

Due to mismanagement including an ill founded introduction of “all-the-shrimp-you-can-eat” as a permanent menu item. Other factors leading to loss in customer loyalty include extreme competition, neglect of maintenance, poor service and other deficiencies, resulting in progressive losses.  Negative publicity also followed the ‘fake scallop’ and ‘lobster bisque’ revelations.  At the time of filing for Chapter 11, the chain operated 650 locations worldwide but many of these restaurants will be closed in an attempt to restore profitability.