Red Lobster Abruptly Closes at Least 48 Restaurants in US Amid Bankruptcy Reports

By Trisha Andrada

May 14, 2024 02:26 AM EDT

Red Lobster
A sign is posted in front of a Red Lobster restaurant on May 16, 2014 in San Bruno, California.
(Photo : Justin Sullivan/Getty Images)

Red Lobster, which has been the subject of bankruptcy reports due to financial difficulties, is abruptly closing 48 sites throughout the United States. This was confirmed by TAGeX Brands, one of the leading restaurant liquidators in the country.

Red Lobster Holds Online Auction to Sell off Assets

Red Lobster is liquidating its assets via an online auction run by TAGeX Brands. The items up for grabs include kitchenware, furniture, and more.

Company founder Neal Sherman said in a LinkedIn post that the auction starts on Monday, May 13, and lasts through Thursday, May 16.

CNN cited local news outlets reporting that Red Lobster restaurants in Buffalo, Orlando, Jacksonville, and other places were listed as "temporarily closed" on their website.

READ NEXT: Former Seafood Giant Red Lobster Nears Bankruptcy Due To Declining Sales and Mismanagement

Red Lobster Considering Bankruptcy

Claims surface that Red Lobster is contemplating a bankruptcy file. The hiring of a restructuring specialist as chief executive officer by the business may be an indicator of its imminent bankruptcy.

Former Red Lobster executives and food industry watchers agree that the pioneering restaurant chain's recent downturn is attributable, in part, to corporate mismanagement.

As a major stakeholder in the company in 2020, Thai Union - a supplier to Red Lobster for many years - took an undeclared financial interest. Red Lobster has gone through four CEOs since then, and last year, they had an all-you-can-eat shrimp bargain that hurt Thai Union's profits and slowed down table service.

Thai Union said earlier this year that it would be selling its shares in Red Lobster, incurring a loss of $530 million.

READ MORE: Seafood Chain Red Lobster Initiates Search for Buyer Amid Looming Bankruptcy Filing

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