Red Lobster, the casual dining chain that won fans with inventions like popcorn shrimp and ''endless'' seafood deals, has filed for Chapter 11 bankruptcy protection.
The 56-year-old chain made the filing late Sunday, days after shuttering dozens of restaurants.
''This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth," said Red Lobster CEO Jonathan Tibus, a corporate restructuring expert who took the top post at the chain in March.
Red Lobster said it will use the bankruptcy proceedings to simplify its operations, close restaurants and pursue a sale. As part of the filings, Red Lobster has entered into a so-called ''stalking horse'' agreement, meaning it plans to sell its business to an entity formed and controlled by its lenders.
The Orlando, Florida-based chain was founded by Bill Darden, who wanted to make seafood restaurants more accessible and affordable for families. Darden sold Red Lobster to General Mills in 1970. General Mills later went on to form Darden Restaurants, which owns Olive Garden and other chains, and spun the company off in 1995.
In recent years, Red Lobster has been struggling with increasing competition from fast casual chains like Chipotle as well as rising lease and labor costs. Its all-you-can eat deals for shrimp and lobster also became increasingly expensive.
Last fall, Red Lobster lost millions of dollars on its Ultimate Endless Shrimp promotion, which charged $20 for all-you-can-eat shrimp deal.
''We knew the price was cheap, but the idea was to bring more traffic in the restaurants,'' Ludovic Garnier, the chief financial officer of Thai Union Group, Red Lobster's former co-owner, said in an earnings call with investors.
