Red Lobster hired auction company ‘very recently’ before shutting 50 restaurants, may file for bankruptcy next week: sources

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Red Lobster hired a liquidation institution connected short announcement earlier unexpectedly closing dozens of locations this week — and is expected to record for bankruptcy arsenic early arsenic Monday, The Post has learned.

Auction institution TAGeX Brands was retained “very recently” to waste disconnected nan furnishings and instrumentality astatine 50 of nan shuttered Red Lobster restaurants, nan firm’s laminitis Neal Sherman told The Post.

“We’ve ne'er seen arsenic galore locations beryllium closed and auctioned disconnected astatine nan aforesaid clip and we’ve been doing this for 37 years,” said Sherman, adding that last bids are owed Thursday.

Red Lobster operates 650 stores crossed nan state and began closing dozens of them this week. AFP via Getty Images

The nation’s largest seafood concatenation — known for its all-you-can-eat shrimp woody — precocious informed vendors that a Chapter 11 filing was imminent aft it had grounded to find a purchaser or reel successful caller investors, according to a bankruptcy lawyer pinch knowledge of nan situation.

“They person been planning to record for a while,” nan lawyer, who said he said pinch 1 ample vendor, told The Post.

The Orlando, Fla-based company, which had 650 locations nationwide earlier nan abrupt closures, has been mulling filing for bankruptcy, as The Post reported past month.

Late Tuesday, nan Wall Street Journal reported that Red Lobster plans to record for bankruptcy earlier Memorial Day and will usage nan process to get retired of onerous contracts pinch landlords.

The move could trim hundreds of millions of dollars successful debt, according to nan outlet. 

Some Red Lobster labor showed up to activity only to study that their edifice had closed. REUTERS

The expected bankruptcy filing comes aft nan struggling concatenation locked retired hundreds of employees who had shown up to activity and were greeted pinch a motion saying that their edifice was closed.

Restaurant Business Magazine reported 99 locations were closing.

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Red Lobster has been struggling for years, but nan last straw appears to person been a money-losing $20 all-you-can-eat shrimp promotion past summer, which costs nan institution $11 million.

The company’s largest shareholder – Thai Union, a publicly-held institution pinch a 49% liking – announced successful January that it would beryllium exiting its finance soon aft nan shrimp fiasco.

A Red Lobster worker David Brown has worked for a Florida edifice for 37 years. Bob Self/Florida Times-Union / USA TODAY NETWORK
The iconic edifice concatenation mislaid millions of dollars connected a excessively generous shrimp promotion past year. AFP via Getty Images

The Bangkok-based seafood supplier raised nan value of nan shrimp woody by $5 by nan fall, but still mislaid money connected nan promotion.

“We knew nan value was cheap, but nan thought was to bring much postulation successful nan restaurants,” Thai Union main financial serviceman Ludovic Garnier said connected an net call. “We request to beryllium overmuch much observant regarding what are nan introduction points and what is nan value constituent we are offering for this promotion.” 

Thai Union, which bought into nan marque successful 2016 and accrued its liking successful 2020, took a $530 cardinal write-down connected its investment, nan institution said.


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