Red Lobster is exiting its Chapter 11 bankruptcy after a federal judge approved the seafood restaurant chain's restructuring plan Thursday — four months after the company first announced it had filed for bankruptcy.
It's a glimmer of good news for the business, which has faced a series of struggles including huge amounts of debt and location closures and several bad business decisions by previous leaders — including its famous $20 all-you-can-eat-shrimp promotion.
As part of the company's restructuring plan, a group of investors under the name RL Investor Holdings LLC will acquire the Red Lobster restaurant chain. The acquisition is expected to close before the end of September, the company announced. Red Lobster will also bring on Damola Adamolekun as the new CEO. Jonathan Tibus, who served as the company's CEO during the reorganization, is set to step down and leave the company.
"This is a great day for Red Lobster," Adamolekun said in a statement. "With our new backers, we have a comprehensive and long-term investment plan – including a commitment of more than $60 million in new funding – that will help to reinvigorate the iconic brand while keeping the best of its history."
After closing a series of locations during its financial issues, Red Lobster still operates 544 locations across the U.S. and Canada — down from its roughly 580 restaurants four months ago.
The money troubles also forced Red Lobster to sell off its defunct locations' equipment — a situation that comedian John Oliver took advantage of.
Oliver, who heads the HBO news show Last Week Tonight with John Oliver, announced in a June episode that his show bought all of the kitchen equipment and furniture from an upstate New York Red Lobster New York at auction, then used those items to create his own look-a-like Red Lobster in his studio that sold only the chain's famous Cheddar Bay biscuits.
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