Red Lobster has been authorized to pay millions of dollars to vendors, a judge overseeing the restaurant chain’s bankruptcy petition ruled.
Additionally, the Orlando, Florida, U.S.A.-based operator of around 550 restaurants may close more than 100 additional restaurants if it’s unable to renegotiate leases, according to bankruptcy documents.
U.S. Bankruptcy Judge Grace A. Robson is permitting Red Lobster to pay up to USD 49.8 million (EUR 45.7 million) toward pre-petition amounts owed to certain vendors for goods delivered to Red Lobster within 20 days of the company's bankruptcy filing, according to Seafax.
Robson did not specify which vendors would be paid first, but Performance Food Group and Gordon Food Service are among the largest of Red Lobster’s 100,000 creditors, according to the bankruptcy filing. Red Lobster’s liabilities were listed between USD 1 billion (EUR 917 million) and USD 10 billion (EUR 9.2 billion).
Richmond, Virginia, U.S.A.-based Performance Food Group is owed around USD 24.4 million (EUR 22.4 million), while Toronto, Ontario, Canada-based Gordon Foodservice Canada is owed USD 1.2 million (EUR 1.1 million).
Red Lobster lists 228 leases for restaurants that will result in additional losses for those locations if they continue operating as-is, according to Restaurant Business. Red Lobster already closed around 99 restaurants in mid-May.
On 31 May, the New York Post reported Red Lobster may have to close its Times Square location in New York City, as the landlord is doubling the eatery’s annual rent to USD 2.2 million (EUR 2 million).
Clackamas, Oregon, U.S.A.-based Pacific Seafood was the first seafood supplier to file a claim in the bankruptcy case, saying Red Lobster owes it USD 1,938.25 (EUR 1,778). Other seafood industry creditors that could follow suit include Ocean Beauty, the Ocean Seafood Depot, Red Chamber Co., Luke's Lobster, the Seafood Nutrition Partnership, Star Lobster Seafood Market, Blue Star Foods, Devi Fisheries, The Fish Guys, and ID Seafood, as well as former minority owner Thai Union Group.
Canadian Judge Michael Penny issued a 28 May order that enforces Red Lobster’s bankruptcy petition in Canada. The restaurant chain has 27 locations across Ontario, Alberta, Manitoba, and Saskatchewan and employs around 2,000 in Canada.
“Everything we are trying to do today is to stabilize the business,” Red Lobster Canada Attorney Linc Rogers told the Global News.
