Red Lobster owes seafood wholesaler Red Chamber Co. more than USD 7.6 million (EUR 7.1 million), a court filing in its Chapter 11 bankruptcy case revealed.
Vernon, California, U.S.A.-based seafood wholesaler Red Chamber submitted a USD 7.6 million (EUR 7.1 million) claim in the case, which is being overseen by the U.S. Bankruptcy Court in Orlando, Florida, U.S.A.
In the 11 June claim, Red Chamber detailed evidence it supplied 31/35 peeled, deveined, tail-on shrimp at USD 3.80 (EUR 3.54) per pound for a total of USD 2.53 million (EUR 2.36 million) and 21/23 “Walt’s favorite” shrimp at USD 4.15 (EUR 3.86) a pound for around USD 2.1 million (EUR 1.9 million) as a member of Red Lobster’s shrimp vendor inventory program. The company also supplied 14/16 coconut shrimp at USD 4.70 (EUR 4.37) per pound; 36/40 peeled, deveined IQF shrimp at USD 3.70 (EUR 3.44) a pound; and peeled, deveined, tail-on IQF shrimp at USD 4.50 (EUR 4.19) per pound.
The contracts were confirmed in letters from Red Lobster Strategic Sourcing Manager Cliff Culhane to Red Chamber Vice President Andro Chen, according to the documentation provided by Red Chamber.
In a separate October 2022 email to Chen and other Red Chamber executives marked by a "Red Lobster Shrimp Quality Initiative *Urgent*" subject line, Culhane said the restaurant chain was struggling with quality issues in its breaded shrimp program.
“Due to recent events surrounding quality concerns with our breaded shrimp SKUs within the restaurant, we are taking steps and formulating an action plan to work hand in hand with our suppliers to resolve these issues and chart a better path moving forward for our guests, our brand, and each other,” Culhane wrote.
Clackamas, Oregon, U.S.A.-based Pacific Seafood was the first seafood company to file a claim against Red Lobster during its bankruptcy, claiming it is owed USD 1,938.25 (EUR 8,674).
Seattle, Washington, U.S.A.-based Ocean Beauty Seafoods is the only other seafood firm to so far make a claim, stating it is owed USD 539.50 (EUR 502).
Other seafood industry creditors could follow suit, including Ocean Seafood Depot, Luke's Lobster, the Seafood Nutrition Partnership, Star Lobster Seafood Market, Blue Star Foods, Devi Fisheries, The Fish Guys, and ID Seafood, according to a list of major creditors provided by Red Lobster. Performance Food Group (PFG) is listed as Red Lobster’s largest creditor, with USD 24.4 million (EUR 22.4 million) in debt. Creditors have submitted 10,555 claims as of 20 June.
Red Lobster, which listed its liabilities at between USD 1 billion and USD 10 billion (EUR 917 million and EUR 9.2 billion), has more than 100,000 creditors in all, with Performance Food Group (PFG) listed as Red Lobster’s largest creditor.
Red Lobster part-owner Thai Union, which announced its divestment from the chain in January 2024, is also one of Red Lobster’s largest creditors. However, Red Lobster CEO Jonathan Tibus has accused Thai Union of pressuring his company to move more of its business to Thai Union, resulting in Red Lobster paying higher prices for its shrimp. Tibus also criticized the role the company played in the failure of its Ultimate Endless Shrimp promotion. However, Thai Union is fighting back against those accusations.
