NEW YORK — After months of dozens of restaurant closings and headlines about “endless shrimp” woes, Red Lobster is poised to soon exit from Chapter 11 bankruptcy protection.
A U.S. bankruptcy judge on Thursday approved the casual seafood chain's reorganization plan and sale to a lender group led by asset manager Fortress. The green light arrives under just four months after Red Lobster filed for bankruptcy protection as it pursued a sale, following years of mounting losses and dwindling customers while it struggled to keep up with competitors.
At the time of filing in May, Red Lobster's leadership shared plans to “simplify the business” through a reduction of locations. The Orlando, Florida, chain shuttered a number of its North American restaurants in recent months — both leading up to and during the bankruptcy process. That includes more than 50 locations whose equipment was put up for auction just days before the Chapter 11 petition, followed by dozens of additional closures throughout the bankruptcy process.
Red Lobster said Thursday that it expects to operate about 544 locations across the U.S. and Canada upon emerging from bankruptcy. That's down from 578 disclosed as of May’s filing.
Under terms of the acquisition, which is expected to close at the end of September, the chain will continue to operate as an independent company.