Red Lobster Closes More Restaurants as Buyer Emerges

As Red Lobster continues to shutter stores amid bankruptcy proceedings, help may be on the way. 

On Monday, RL Purchaser LLC, a new conglomerate of Red Lobster’s lenders formed by Fortress Credit Corp., Red Lobster’s largest creditor, made a play for the seafood chain in a deal worth about $376 million, according to The Orlando Business Journal. RL Purchaser would reportedly get control of Red Lobster as part of an equity transfer.

Fortress isn’t new to the business of restaurants. The group owns other chains, including Krystal, Logan’s Roadhouse, and J. Alexander’s, per CNN.

While the seafood chain’s severe debt has been blamed on supply and cost issues surrounding its all-you-can-eat shrimp promotion, the restaurants saw enough growth during the pandemic to rehire 26,000 employees in 2021, along with a new head of finance, chief marketing officer, and chief information officer, according to CNN.

Meanwhile, Red Lobster has shuttered at least seven new restaurants since filing for bankruptcy in May, USA Today reported. 

The restaurant closings include two in Florida and one each in Alabama, Arizona, California, Colorado, and Texas:

• Tuscaloosa, Alabama
• Phoenix, Arizona (North 75th Ave.)
• Monrovia, California
• Greeley, Colorado
• Clermont, Florida
• The Villages, Florida
• San Antonio, Texas (US 281 North)

As of June 26, 106 Red Lobster locations have closed. There are almost 600 stores still open.

RL Purchaser was the only organization to place a bid by the July 18 deadline, according to Nation’s Restaurant News, citing a document filed with the Orlando division of the bankruptcy court of the Middle District of Florida, so a proposed auction was canceled.

A hearing to approve the sale is scheduled for July 29.

This isn’t the first time Red Lobster has been sold off. Back in 2014, Golden Gate Capital bought the chain from Darden Restaurants for an estimated $2.1 billion. After an initial investment in 2016, Thailand-based Thai Union Group acquired 49% of the company in 2020, according to CNN.