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Red Lobster files for bankruptcy. What we know about seafood chain founded in Florida

USA TODAY NETWORK - Florida

Red Lobster has filed for bankruptcy after closing dozens of restaurants in Florida and nationwide earlier this month.

The nationֱs largest seafood restaurant chain was founded in Lakeland, Florida, by Bill Darden (of Darden Restaurants) and Charles Woodsby.

Last week, manyֱRed Lobster locations closedֱacross the country, including more than a dozen in Florida.

Signs on the door of some Red Lobster locationsֱwith empty parking lots, including one in Leesburg and others around the country, said, "This location is closed. Weֱlook forward to serving you at another Red Lobsterֱin the future."

Several national media outlets reported thatֱ. Theֱclosures are also in seven states other than Florida.

TAGeX Brands, a company that helps firms with closures and liquidations, announced on its website thatֱֱfrom more than 50 Red Lobster restaurants, including five in Florida: Altamonte Springs, Gainesville, Hialeah, Largo and Orlando. The company page is titled "THE LARGEST RESTAURANT EQUIPMENT AUCTION EVER."

Red Lobster, the once-popular seafood restaurant that started in Lakeland, Florida, in the late 1960s,ֱfiled for Chapter 11 bankruptcy on Sunday, May 19, according to multiple news sources.

Frog legs? Whiskey sour?As Red Lobster locations close, here's a look back at the Florida-original restaurant, its menu

What does this mean for theֱpopular restaurant chain and its Florida locations? Here's what we know.

Why did Red Lobster file for Chapter 11 bankruptcy?

After filing for Chapter 11 bankruptcy Sunday night, the company said in a statement that "it intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern. As part of these filings, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders."

Red Lobster's restaurants will remain open and operating as usual during the Chapter 11 process.

CEO Jonathan Tibus said in a news release that "this restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth. The support we've received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests."

In an April 2024ֱ, the seafood chain was considering a bankruptcy filing to renegotiate burdensome leases and address other long-term contracts, as well as rising labor costs.

According to Bloomberg,ֱRed Lobster has been finding it difficult to make money with its current leases and labor costs. It has also beenֱֱby CNN the company suffered $12.5 million operating loss in the fourth quarter of 2023, despite its popular endless shrimp promotion.

By filing for Chapter 11 bankruptcy, the company would stay open while it reorganizes funds to pay off existing debt over time, seeking to continue with better financial footing.

Who founded Red Lobster? Seafood restaurant chain started in Florida

Red Lobster was founded in 1968 in Lakeland, Florida, by Bill Darden and Charley Woodsby.

General Mills acquired the company in 1970 and helped it expand into North America, before establishing a new company for its restaurant brands called Darden Restaurants Inc. in 1995. Darden also owned the Italian restaurant chain, Olive Garden.

Almost 20 years later, Darden Restaurants sold Red Lobster to Golden Gate Capital in 2014. Thai Union, which previously had a one-fourth stake in the company, bought out Golden Gate's stake in the company in 2020.

Who owns Red Lobster?

This year, Thai Union Group revealed that it intended to exit its minority investment in Red Lobster.ֱ

"The combination of Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders," Thiraphong Chansiri, Thai Union Groupֱs CEO, said in a news release.

Red Lobster brought in Jonathan Tibus as itsֱֱrecently, according to Fox Business.

How manyֱRed Lobster restaurants in Florida closed?

A week before Red Lobster officially filed for Chapter 11 bankruptcy, the seafood chain listed more than 60 restaurant locations in 49 Florida cities on its website. Each has a page listing a local restaurantֱs hours. A search of the Red Lobster website had locations in these cities listed as ֱClosedֱ under its hours for all days of the week:

  • Jacksonville: All 3
  • Daytona Beach Shores
  • Gainesville
  • Hialeah
  • Jensen Beach
  • Kissimmee: 1 of 3, (4010 W. Vine St., Kissimmee)
  • Largo
  • Leesburg
  • Orlando: 3 of 6, (5936 International Drive, Orlando; 3552 E. Colonial Drive, Orlando; 617 N. Alafaya Trail, Orlando)
  • Sanford
  • Tampa: 2 of 3 (6161 34th St. North, St. Petersburg; 11601 N. Dale Mabry, Tampa)

As of Monday, May 20, 2024, many restaurant locations in Florida still appear open onֱ.