Red Lobster is coming out of Chapter 11 bankruptcy. A federal judge approved the seafood chain's plan to recover from their "endless shrimp" issue, heavy debt, and declining guests.
RL Investor Holdings LLC, created by Fortress Investment Group, will now acquire Red Lobster. This acquisition should be completed by the end of the month, according to the restaurant's news release.
Fortress has a track record of buying companies that have gone bankrupt, like Vice Media and Alamo Drafthouse. Alamo was later sold to Sony Pictures.
Fortress also owns SPB Hospitality, which includes brands like Logan's Roadhouse, Krystal, and Old Chicago Pizza. "It's an area where we have a lot of experience," said spokesperson Gordon Runté. "Red Lobster is a big project with 500-plus locations, but we're excited."
Once the acquisition wraps up, Damola Adamolekun will take over as CEO. He will replace Jonathan Tibus, who is stepping down. Adamolekun previously led P. F. Chang's.
"This is a great day for Red Lobster," Adamolekun said. With new backers, they have over $60 million in funding to rejuvenate the brand.
"Red Lobster has a bright future," he added. "I’m eager to work with our 30,000 team members in the USA and Canada."
"I’m proud of Red Lobster's progress," Tibus said. "The company will emerge from Chapter 11 stronger with new backers committed to growth."