As WLT Report covered last month, Red Lobster Management LLC, the owner of Red Lobster seafood restaurant, announced that the company has voluntarily filed for relief under Chapter 11.
Red Lobster’s bankruptcy filing comes as the chain faces significant debt, unfavorable lease terms, and after receiving lackluster results from its all-you-can-eat shrimp promotion.
The company has already started 93 restaurants and plans to shut down an additional 135 restaurants.
Now, a billionaire looks to save Red Lobster.
An investment firm run by billionaire Milwaukee Bucks co-owner Wesley Edens is trying to save Red Lobster from closing.
Fortress Investment Group, which is co-owned by Edens, is creating a strategy to save the restaurants from bankruptcy.
Milwaukee Bucks’ billionaire co-owner wants to save Red Lobster from bankruptcy https://t.co/eFpll4fhgQ pic.twitter.com/lw6Ndrlk4C
— New York Post (@nypost) June 14, 2024
Check out what The New York Post reported:
A Wall Street investment firm run by billionaire Milwaukee Bucks co-owner Wesley Edens could swoop in to save Red Lobster from bankruptcy, according to a report.
Fortress Investment Group, the $48 billion private equity firm that specializes in rehabilitating distressed businesses, is the most likely company that is expected to take charge of the struggling casual dining chain as it looks to climb out of Chapter 11, according to Bloomberg News.
Executives at Fortress, which was founded by Edens, Rob Kauffman and Randal Nardone, are poring over Red Lobster’s books in an attempt to figure out why its restaurants are failing, Bloomberg News reported.
Fortress, which already holds a large chunk of Red Lobster’s debt, is also reportedly mapping out a strategy for the restaurant chain’s comeback by identifying which regions and demographics would best support a revival of its popularity.
Edens’ firm is particularly keen on shedding Red Lobster’s onerous lease agreements that have put a major dent in its bottom line, according to Bloomberg News.
Last month, Red Lobster, which previously boasted 550 locations, filed for Chapter 11 bankruptcy protection after it shuttered 93 restaurants.
Court filings revealed that the chain is in danger of shutting down an additional 135 restaurants if the company is unable to renegotiate the terms of its leases.
Milwaukee Bucks’ billionaire co-owner wants to save Red Lobster from bankruptcy
— 🌴PalmTreePatriot🌴 (@FLMomNYGirl) June 14, 2024
Check out what Yahoo Finance reported:
Barbs immediately began to fly after Red Lobster filed for bankruptcy last month.
Its new chief executive blamed the owners. The owners blamed prior owners. Covid-19, corporate greed and a now-infamous $20, all-you-can-eat shrimp deal all took their hits.
Onlookers also pointed to changing tastes — perhaps American diners simply no longer want to eat Walt’s Favorite Shrimp in a wood-paneled restaurant their grandparents may have frequented.
The real story is a combination of factors that slowly drove an iconic American chain into financial despair over more than a decade. Finally unable to pay rent, offer unlimited shrimp or hold onto a zeitgeist around the brand after it appeared in Beyoncé lyrics, Red Lobster had to legally call it quits.
Now, the company faces choices that aren’t easy and may not turn its fortunes around. Its most likely savior is Fortress Investment Group, a Wall Street firm that manages $48 billion and scouts opportunities in distressed companies.
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