A bankruptcy judge has approved the sale of Red Lobster, a move aiming to breathe new life into the struggling seafood restaurant chain.
Red Lobster’s parent company has announced the court has given the green light for its Chapter 11 bankruptcy plan. The sale will transfer ownership to funds managed by affiliates of Fortress Investment Group, along with co-investors TCW Private Credit and Blue Torch Capital. The deal is expected to close by the end of the month.
New Leadership and Investment Plans
Former P.F. Chang’s CEO, Damola Adamolekun, is set to take the helm as Red Lobster’s new chief executive following the sale. Adamolekun emphasized that the chain’s new backers have committed over $60 million in funding to revitalize the brand.
He said:
“With our new backers, we have a comprehensive and long-term investment plan that will help reinvigorate the iconic brand while keeping the best of its history.”
Red Lobster’s Struggles and Bankruptcy
Red Lobster filed for bankruptcy in May. It joined several other restaurant chains that have sought financial protection or buyers over the past year as inflation-hit diners search for cheaper dining options.
One of the company’s key missteps was a poorly timed all-you-can-eat shrimp promotion. The move contributed to millions in losses rather than driving the expected boost in customer traffic. Earlier this year, Red Lobster’s largest owner, Thai Union Group, sold its stake in the company.
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Fortress Group’s Role in the Restaurant Sector
The lender group is led by Fortress. It has extended around $300 million in loans to Red Lobster and took steps this summer to gain control of the company. Fortress has a history of acquiring restaurant chains out of bankruptcy, including Krystal Restaurants and Logan’s Roadhouse.
Red Lobster to Continue Operations
Following the sale, Red Lobster will remain an independent company. It will continue to operate 544 locations across 44 U.S. states and four Canadian provinces.
As the brand prepares for a new chapter under Fortress Investment Group, the long-term investment plan and fresh leadership aim to steer the seafood chain toward recovery while preserving its well-established history.
