A Florida based chain that filed for bankruptcy has reportedly found a potential buyer

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Who would have thought that a chain known for its endless shrimp promotion could find itself in such a pickle? But here we are—Florida-based Red Lobster, which has been reeling from financial troubles, may have finally found a lifeline. After a surprising $11 million loss in the third quarter of 2023 due to that very shrimp deal, Red Lobster filed for bankruptcy in May 2024. And now, there’s a glimmer of hope on the horizon.

For many, Red Lobster’s connection to Florida is a point of pride. The chain, which started as a single restaurant in Lakeland, has grown into a global presence with over 700 locations worldwide. Despite some recent store closures, the Sunshine State still boasts 44 Red Lobster locations, where loyal customers continue to flock.

So, what’s next for Red Lobster? On July 22, 2024, the restaurant chain filed "designation of successful bidder" paperwork in Florida’s U.S. Bankruptcy Court for the Middle District of Florida. The potential buyer? RL Purchaser LLC, a stalking horse bidder supported by Red Lobster’s lenders. The proposed bid stands at a hefty $376 million.

What’s interesting about this bid is that it involves an equity transfer rather than a traditional asset purchase. This approach allows the new buyer to sidestep the liabilities associated with a typical sale, potentially giving Red Lobster a fresh start without dragging along its financial baggage.

During a recent court hearing, King & Spalding LLP, the legal team representing Red Lobster, assured that the company plans to maintain “operational continuity.” In other words, if everything goes according to plan, your favorite seafood spot might not just survive but continue to serve those delicious lobster dishes for years to come.

As Red Lobster navigates through this challenging period, all eyes will be on the court’s decision and the successful bidder’s plans. If the proposed deal goes through, it could mark a significant turnaround for the beloved chain. So, if you’re a fan of those endless shrimp or just a fan of Red Lobster in general, stay tuned. The next chapter in Red Lobster’s story might just be a comeback.