After closing more than 100 locations following the announcement of its bankruptcy, restaurant chain Red Lobster is hoping it can successfully negotiate leases on several additional locations that are on the chopping block.
At a creditor meeting held on 28 June, Red Lobster CEO Jonathan Tibus said the chain will close several additional restaurants because negotiations with landlords on the locations’ leases fell through.
Red Lobster, which filed for bankruptcy on 20 May, now operates 570 restaurants globally, down from the 686 it operated previously. As part of its bankruptcy proceedings, Red Lobster revealed a list of another 120 stores that it has listed for potential closure. However, Tibus said his goal is to keep as many of the chain's remaining restaurants open as possible.
“We have successfully negotiated with landlords and have taken some off the list,” Tibus said, adding that company executives are continuing to negotiate with other landlords on lease terms and are “hoping for successful negotiations with all of the landlords.”
“I don’t think it’s a likely option, but it’s what I am hoping for,” he said.
Ultimately, however, decisions on which restaurants will be closed will be made by Red Lobster’s eventual buyer, Tibus said. If the buyer has a different operating blueprint than current management, the chain may be forced to close additional restaurants, he said.
“We are pressing on all the landlords for savings; we are pressing some more because they are poorly performing locations,” Tibus said.
Also released recently via court proceedings are claims made by Red Lobster's unsecured seafood creditors.
These creditors include Stonington, Maine, U.S.A.-based Greenhead Lobster, which claimed USD 33,043 (EUR 30,497) in bills owed; KS Seafood of Encino, California, asking for around USD 15,100 (EUR 13,900); Supreme Lobster and Seafood Company in Villa Park, Illinois, which said it is owed USD 8,425 (EUR 7,776); Point Lobster Co. in Point Pleasant Beach, New Jersey, claiming USD 8,022 (EUR 7,404); The Lobster Guys SW in Las Vegas, Nevada, claiming USD 10,856 (EUR 10,000); ID Seafood in Encino, California, claiming USD 9,869 (EUR 9,109); Ontario, Canada-based Caudle’s Catch Seafood claiming USD 493 (EUR 455); Newark, New Jersey-based Ocean Seafood Depot claiming USD 1,560 (EUR 1,439); and Orlando, Florida-based Bar Harbor Lobster Co. claiming USD 465 (EUR 429).
Several additional seafood industry companies and organizations have also submitted claims with no amount listed. They include Travel Lobster in Bloomington, Indiana; Consolidated Catfish in Isola, Mississippi; Caribbean Sustainable Fisheries USA in Charleston, South Carolina; the Alaska Seafood Marketing Institute in Juneau, Alaska; Bellevue, Washington-based Direct Source Seafood; Luke’s Seafood in Saco, Maine; Seattle Shrimp and Seafood Company in Seattle, Washington; Winchester Seafood in Gaithersburg, Maryland; the Global Sustainable Seafood Initiative in Haarlem, Netherlands; and Global Trusted Advisors (Seafood Inspector) in Botucatu, Brazil.
“We don’t have a [payment] time frame for unsecured creditors,” Red Lobster Attorney Jeff Dutson, a restructuring partner at law firm King & Spalding, said during the 28 June hearing, after a creditor asked how long it would take to receive payments once they submit claims.
Dutson confirmed a 28 July deadline for unsecured creditors to submit claims.
A supplier to a Red Lobster location in Toronto, Ontario, Canada, subsequently asked whether post-petition invoices will be paid in a timely manner, as the company submitted an invoice on 26 May and had not been paid as of 28 June.
According to Tibus, post-petition invoice payments should “roll through” as normal, as long as all listed services were provided post-petition.
Thai Union, Red Lobster’s former minority owner, which Red Lobster has said exerted “undue influence” on its supply chain, resulting in its bankruptcy, has yet to submit a claim.
To shore up sales at its existing restaurants, Red Lobster is teaming up with rapper Flavor Flav again after enlisting his help in mid-June to promote its Crabfest promotion.
On 1 July, Red Lobster rolled out a new meal available for a limited time: Flavor Flav's Faves Signature Meal. The entree includes Maine Lobster Tail, Snow Crab Legs, Garlic Shrimp Scampi, and Bacon Mac & Cheese – all served on one plate.
"When you have someone like Flavor Flav who shows their love for a brand by ordering the entire menu, you know there is a lot more fun to be had," Red Lobster Chief Experience Officer Sara Bittorf said. "Flavor Flav's passion for Red Lobster is unmatched, and we're excited to bring our guests a flavor experience unlike any other.”
