TORONTO — Red Lobster has filed for Chapter 11 bankruptcy in the U.S. and has brought an application to the Ontario Superior Court of Justice to have the U.S. bankruptcy recognized and enforced in Canada, reports CBC News.
The chain, which at its peak operated 700 restaurants across the U.S. and Canada, posted major financial losses in the U.S. in late 2023 — partly due to an all-you-can-eat-shrimp promotion that became a permanent staple of its menu last summer.
Daniel So, a franchise lawyer in B.C. told CBC News that the Chapter 11 bankruptcy will give the chain time to assess which of its Canadian locations are profitable.
“It really gives them a lot of runway to figure out whether they’re going to continue to operate in Canada, or if they’re going to start closing down some of the locations up here,” said So. “The real estate that they own up here can be of great value and they’ll have some time to negotiate with the landlords and creditors.”
