Red Lobster said it is restructuring to optimize its real estate footprint and to facilitate a going concern sale.
(Photo: PR Newswire)
By Christina Phillips
Red Lobster Management, LLC, along with its direct and indirect operating subsidiaries, owner and operator of the Red Lobster seafood restaurant chain, announced that the Company has voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida.
In a news release on May 19, the Company said 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 said the company 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 said its restaurants will remain open and operating as usual during the Chapter 11 process, and that the Company has been working with vendors to ensure that operations are unaffected.
The Company reported that it has received a $100 million debtor-in-possession (“DIP”) financing commitment from its existing lenders.
Jonathan Tibus, Red LobsterCEO, said “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.”
King & Spalding, Berger Singerman, and Blake, Cassel & Graydon are serving as legal advisors. Alvarez & Marsal is serving as financial advisor and providing corporate leadership as Chief Executive and Chief Restructuring Officers. Hilco Corporate Finance is serving as M&A advisor to Red Lobster. Keen-Summit is serving as real estate advisor.
Court filings and information about the claims process can be found at a separate website maintained by Red Lobster’s claims agent, https://dm.epiq11.com/RedLobster, or by calling Toll Free (U.S.& Canada): (888) 754-0507.
Headquartered in Orlando, Fla., Red Lobster was founded in 1968 when Bill Darden opened the first restaurant in Lakeland, Fla. In 1970, Red Lobster became part of General Mills until 1995 when the Company spun off its restaurant division as Darden Restaurants. In 2014, Red Lobster became an independent company.
More information:
http://www.redlobster.com
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