On May 19, 2024, Red Lobster, the iconic seafood dining chain, filed for Chapter 11 bankruptcy protection. The 56-year-old company made the filing late Sunday after closing dozens of locations. Despite the bankruptcy, its 600 restaurants will continue operations, aiming to simplify its structure, close additional locations, and pursue a sale. The chain has 551 U.S. restaurants, 27 in Canada, and 27 franchised locations internationally, employing 36,000 people in North America.

As part of the filing, Red Lobster entered a "stalking horse" agreement to sell the business to an entity formed and controlled by its lenders. CEO Jonathan Tibus, appointed in March, emphasized that restructuring would address financial and operational challenges, helping the company emerge stronger.

The bankruptcy follows two decades of competition and financial missteps. Aaron Allen, of Aaron Allen & Associates, noted Red Lobster's repeated failures with promotions like the "Ultimate Endless Shrimp" and "Endless Crab," which led to significant losses. The chain's annual guest counts fell 30% from 2019, with a $103.46 million (US$76 million) loss in 2023.

Red Lobster was founded by Bill Darden in 1968, and it became part of General Mills in 1970. In 2014, it was sold to a private equity firm, and Thai Union Group invested in 2016. Thai Union announced plans to exit its investment in January, citing prolonged financial difficulties. The chain now faces a significant reduction in its restaurant footprint as part of the bankruptcy process, with many buyers interested primarily in its real estate.