Red Lobster now exits its Chapter 11 bankruptcy after receiving court approval for its restructuring plan on Thursday.
On Thursday, Red Lobster announced that it has received court approval for its restructuring plan, allowing it to exit Chapter 11 bankruptcy.
Under this plan, the investment group RL Investor Holdings LLC will acquire Red Lobster by the end of the month.
Alongside this acquisition, there will be a leadership change: Jonathan Tibus, the current CEO, will be succeeded by Damola Adamolekun, the former CEO of P.F. Chang’s.
Adamolekun expressed optimism about the future, stating, “With our new investors, we have a comprehensive long-term plan that includes over $60 million in new funding to reinvigorate this iconic brand while honoring its history.
Red Lobster has a bright future, and I’m excited to begin our initiatives.”
As the restaurant reduced its number of locations to 544, many fans took to social media to share their thoughts on the bankruptcy.
One user on X remarked, “Only in America could we eat Red Lobster into bankruptcy,” while another stated, “Red Lobster is considering a Chapter 11 filing.
I guess you could say the company is in hot water.”
Red Lobster experienced a significant drop in customer visits due to cautious spending in a struggling economy.
In response, the company implemented an unmanageable promotion, hoping to attract more loyal customers and boost daily traffic by offering $20 all-you-can-eat shrimp.
Unfortunately, this low price did not yield the expected results and instead led to an $11 million quarterly loss last November.
The promotion, while enticing, was unsustainable; the high volume of premium seafood served at such a steep discount meant that the increase in traffic was insufficient to offset the losses.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
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A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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