Red Lobster bankruptcy is a hot topic among traders on Monday after the popular seafood chain submitted a voluntary filing this morning.

Red Lobster has announced that it will enter Chapter 11 bankruptcy protection as it works to reduce operating expenses. The company is also looking to reduce its number of locations and pursue a sale of all of its assets as a going concern.

Red Lobster intends to keep its restaurants open throughout the bankruptcy. The company notes that it has already obtained a $100 million debtor-in-possession financing agreement from existing lenders to allow this.

Red Lobster CEO Jonathan Tibus said the following about the bankruptcy.

“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. The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”

Red Lobster Bankruptcy: Locations Closing

Red Lobster closures started last week ahead of the company’s bankruptcy filing. That saw the company shutter dozens of stores across the U.S. The company started this while searching for a buyer. It’s also been dealing with increased inflation changing consumer habits, higher lease prices as well as increasing labor wages.

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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