It could be the end of an era for beloved seafood chain Red Lobster, which officially filed for bankruptcy Monday after months of speculation and dozens of sudden restaurant closings.
Now, the company is talking to loyal customers – and investigating the role its shrimp supplier may have played in its disappearance.
In a letter posted on social media, Red Lobster thanked customers for their nearly five decades of loyalty and assured the masses that the chain wasn't going anywhere.
We are here to celebrate every moment, big or small, with our valued guests. pic.twitter.com/JmAoNGP4a8
– red lobster (@redlobster) May 21, 2024
“Bankruptcy is an often misunderstood word. Filing for bankruptcy does not mean we are going out of business,” writes Red Lobster. “In fact, it means just the opposite. It's a legal process that allows us to make changes to our business and our cost structure so that Red Lobster continues as a stronger company in the future.”
Red Lobster noted that companies including Delta Airlines and Hertz “emerged stronger” after filing for Chapter 11 (Delta in September 2005Hertz in May 2020) and found ways to come back.
“Birthdays, graduations, anniversaries and yes, weddings. We've been here for it all,” the chain wrote. “Red Lobster is committed to being there for these moments for generations to come.”
The fall of the red lobster was a slow burn, is blamed in the first place with an $11 million loss in November 2023 due to the chain's proliferation of an “Endless Shrimp” promotion. The deal offered customers all the shrimp they could eat for $20, and proved a bit too popular.
Last week, she was reported that stores were starting to close without warning across the country, with dozens auctioning off all their furniture and appliances online and some employees claiming they were given no advance notice.
In a filing Sunday, Red Lobster CEO Jonathan Tibus ex called CEO Paul Kenny and Red Lobster's seafood supplier and owner, Thai Union, regarding the decisions made about the Endless Shrimp promotion and that Red Lobster is “currently investigating the circumstances” surrounding the decision to make the promotion permanent in instead of a limited time.
Connected: Infinite Prawn Deal Is Very Popular, Red Lobster Loses $11 Million
“I understand that Thai Union exerted great influence over the company's purchase of shrimp,” Tibus wrote. “(Red Lobster is) exploring the impact of the control exercised by Thai Union, in conjunction with Mr. Kenny and other entities and individuals associated with Thai Union, and whether the actions taken in light of the differing interests of these parties were appropriate and consistent with applicable Duties and Obligations to Red Lobster.”
Thai Union finished it buying red lobster in 2020.