FL-Based, Bankrupt Chain Red Lobster Has Reportedly Found A Potential Buyer For $376 Million

Photo byMike Mozart from Funny YouTube, USA, CC BY 2.0 via WIkimedia Commons

If I had told Floridians five years ago that Florida-based Red Lobster would have financial difficulties due to its popular endless shrimp promotion, I suspect some would not have believed it. However, the company reportedly lost $11 million in the third quarter of 2023 because endless shrimp was more popular than expected. That loss was reportedly one of the reasons the company filed for bankruptcy in May of 2024. Following that, I wrote about the Florida Red Lobster stores that closed. And now, it appears that the bankrupt company may have found a buyer.

Red Lobster And Florida: Many Floridians are aware that Red Lobster got its humble start as one restaurant in Lakeland, Florida. Eventually, it would expand to more than 700 stores worldwide. Considering the recent closures, there are currently 44 Red Lobster stores in Florida, where the chain is currently headquartered.

Some visitors and residents of Florida still enjoy Red Lobster. An Orlando location gets 4.5 out of 5 stars. And a reviewer named Paul wrote in part:

"We visited the Red Lobster in early May 2024 and found the service to be fantastic, friendly, and very attentive. The food was also great. It was very hard to find anything wrong and we thought the price was very fair considering the amount of food that we had - that was all cooked perfectly."

The Potential New Buyer: On July 22, 2024, Red Lobster filed "designation of successful bidder" paperwork in Florida's U.S. Bankruptcy Court for the Middle District of Florida in Orlando. Red Lobster's buyer will reportedly be RL Purchaser LLC, a stalking horse bidder backed by Red Lobster's lenders. The proposed bid was for $376 million.

If Red Lobster's reorganization plan prevails, the transaction will be completed with an equity transfer instead of the purchase of Red Lobster's assets. This would allow the buyer to avoid the liabilities that come with a traditional sale.

During a hearing, King & Spalding LLP, who represents Red Lobster, indicated that the company intends to "maintain operational continuity."

The author is not affiliated with Red Lobster or any other restaurants.