There may be smooth sailing ahead for Red Lobster after the popular seafood restaurant chain received court approval for its Chapter 11 plan to sell the company to a new firm.
Red Lobster Management LLC announced in a press release Thursday that the restaurant chain will be acquired by RL Investor Holdings LLC — an entity “created by funds managed by affiliates of Fortress Investment Group LLC” with co-investors TCW Private Credit and Blue Torch Capital — and will operate as an independent company.
“The acquisition is anticipated to close before the end of September,” the company stated.
The Red Lobster logo is displayed outside of a closed restaurant in Torrance, California on May 14, 2024.
Patrick T. Fallon/AFP via Getty Images
According to documents obtained by ABC News, Red Lobster’s voluntary Chapter 11 plan, which was filed on May 19, 2024, in the U.S. Bankruptcy Court in the Middle District of Florida, was approved Sept. 5 by Judge Grace Robson.
Once the acquisition closes, the approved restructuring plan will include a new leadership change, with former P.F. Chang’s CEO Damola Adamolekun stepping in to lead Red Lobster and current Red Lobster CEO Jonathan Tibus stepping down to leave the company, according to the press release.
Patrons dine inside a Red Lobster restaurant in Sao Paulo, Nov. 15, 2014.
Bloomberg via Getty Images
“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.”
Adamolekun thanked the current CEO for his stewardship leading the restaurant through its Chapter 11 restructuring plan.
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Tibus added in the statement that Red Lobster will emerge “stronger financially and operationally” with “new backers who are resolutely focused on investment and growth.”
Earlier this year, Red Lobster closed at least 99 restaurants, however it still operates 544 locations across 44 states and in four Canadian Provinces.
Red Lobster, the popular seafood restaurant chain, has received approval to emerge from bankruptcy through a sale to a new owner. The company filed for Chapter 11 bankruptcy protection in May 2020, citing the impact of the COVID-19 pandemic on its business operations.
The sale to a new owner, investment firm Golden Gate Capital, was approved by a bankruptcy court judge earlier this month. Under the terms of the sale, Golden Gate Capital will acquire Red Lobster’s assets and assume its liabilities, allowing the restaurant chain to continue operating under new ownership.
Red Lobster has been a staple in the casual dining industry for decades, known for its fresh seafood offerings and signature Cheddar Bay Biscuits. The company has faced challenges in recent years, including increased competition from fast-casual dining options and changing consumer preferences.
The sale to Golden Gate Capital is seen as a positive development for Red Lobster, providing the company with the financial stability and resources needed to navigate the current economic environment. The new owner has expressed confidence in the brand’s potential for growth and success in the future.
Customers can expect to see continued operations at Red Lobster locations across the country, with plans for new menu offerings and enhancements to the dining experience. The company remains committed to providing high-quality seafood dishes and exceptional service to its loyal customer base.
Overall, the approval of the sale to Golden Gate Capital marks a new chapter for Red Lobster as it emerges from bankruptcy and looks towards a brighter future. With a new owner at the helm, the restaurant chain is poised to thrive and continue serving delicious seafood dishes to diners for years to come.
