Red Lobster, With 27 IL Locations, Eyes Bankruptcy After $11M Endless Shrimp Loss

ILLINOIS — Red Lobster, which has 27 stores in Illinois, is considering Chapter 11 bankruptcy to recoup $11 million in losses from its endless shrimp promotion, Bloomberg reported.

Red Lobster’s “Ultimate Endless Shrimp” promotion last year was intended as a limited-time offer but brought in enough new customers that the chain added it to its permanent menu in June. Customers gobbled it up, and the chain reported fourth-quarter 2023 losses of $12.5 million, the outlet reported.

The restaurant’s legal representatives from King & Spalding have advised bankruptcy as a way to stay open while dealing with the debt and re-evaluate long-term contracts and leases, the outlet reported.

Fortress Investment Group, which is one of the chain’s key lenders, is involved in the debt negotiations, Bloomberg reported. Red Lobster brought in a new CEO, Jonathan Tibus, who has worked with other chains restructure as part of Chapter 11 bankruptcy.