NEW YORK — After months of dozens of restaurant closures and headlines about the woes of “endless shrimp,” Red Lobster is on the verge of emerging from Chapter 11 bankruptcy protection.
A U.S. bankruptcy judge on Thursday approved the casual seafood chain’s reorganization plan and its sale to a lending group led by asset manager Fortress. The green light comes less than four months after Red Lobster filed for bankruptcy protection as it sought a sale after years of mounting losses and declining customers as it struggled to keep up with competitors.
In its May filing, Red Lobster executives shared plans to “simplify the business” by reducing the number of locations. The Orlando, Florida-based chain has closed a number of its North American restaurants in recent months — both prior to and during the bankruptcy process. That includes more than 50 locations whose equipment was auctioned off just days before the Chapter 11 filing, followed by dozens of other closures during the bankruptcy process.
Red Lobster said Thursday it expects to operate about 544 locations in the U.S. and Canada after the bankruptcy, down from the 578 it disclosed in May.
Under the terms of the acquisition, which is expected to close by the end of September, the chain will continue to operate as an independent company.
