Anderson Red Lobster not targeted for closing in bankruptcy measures
The Red Lobster restaurant in Anderson, as well as the one in Muncie, have not been targeted for closing as the company, which filed for bankruptcy in May, restructures. Red Lobster, the company that filed for bankruptcy in May, has not been targeted for closing its restaurants in Anderson, Indiana, and Muncie as it restructures. Over 100 additional restaurants have been designated for closing if the company cannot favorably renegotiate its leases. The chain, which is facing more than $1 billion in debt and less than $30 million in cash, also plans to reject leases at locations where they are likely to drive losses. The company's bankruptcy filing stated that rent costs the company $200 million a year, accounting for about 10% of the company's total annual revenue. Some blame the company’s takeover by private equity firm Golden Gate Capital for its debt.
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ANDERSON — The Red Lobster restaurant in Anderson, as well as the one in Muncie, have not been targeted for closing as the company, which filed for bankruptcy in May, restructures.
More than 100 additional Red Lobster restaurants have been designated for closing if the company can't favorably renegotiate its leases, according to information released by the company.
The Red Lobster website notes its restaurants in Kokomo, Richmond and Michigan City will close because of unfavorable leases. Red Lobster locations in Indianapolis (Shadeland Avenue) and Elkhart were closed in May.
The seafood restaurant, in a bankruptcy court filing last week, listed locations where it plans to reject leases because they “are likely to continue to drive losses.”
The chain filed for protection under Chapter 11 bankruptcy last month, citing more than $1 billion in debt and less than $30 million cash on hand. In its initial filing, the chain listed leases, labor costs and the $11 million loss it incurred due its “Ultimate Endless Shrimp” offering, which allowed customers to order as much shrimp as they like for $20.
Some, however, have pointed to the financing mechanism of its takeover by private equity firm Golden Gate Capital in May 2014. As part of that $2.1 billion deal, the property underneath the restaurants the chain used to own was sold off to the tune of $1.5 billion and then leased back to the company. The sale also saddled the company with debt.
According to Jonathan Tibus, Red Lobster CEO, many of the restaurant’s leases are “priced above market rates.” And, according to the company’s bankruptcy filing, rent costs the company $200 million a year. That’s about 10% of the company’s total annual revenue.
In 2020, Golden Gate sold what was left of its stake to Thai Union Group, one of the world’s largest seafood suppliers, and other investors for an undisclosed amount.
Ämnen: Bankruptcy