Pacific Seafood is reportedly the first supplier to make a claim for money owed by the financially challenged Red Lobster restaurant chain. The Clackamas, Oregon-based creditor filed the claim in United States Bankruptcy Court for the Middle District of Florida.
Red Lobster, a major buyer of frozen fish seafood from global suppliers, is 25% owned by the Thai Union Group, which is seeking to divest its holdings after sustaining significant losses said to exceed $500 million.
Red Lobster Management LLC, along with its direct and indirect operating subsidiaries, recently asked for protection under Chapter 11 of the US Bankruptcy Code. The Orlando, Florida-headquartered company stated that it “intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.”
As part of these filings, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders.
Meanwhile, among other Red Lobster creditors seeking payment for goods and services are Performance Food Group, Thai Union Group, Red Chamber Co., Ocean Beauty, Ocean Seafood Depot, Devi Fisheries, Luke’s Lobster, the Seafood Nutrition Partnership, Star Lobster Seafood Market, Blue Star Foods, The Fish Guys and ID Seafood.
While 93 outlets have been closed, most Red Lobster restaurants in the United States are expected to remain open and operating as usual during the Chapter 11 process. The company has been working with vendors to ensure that operations are unaffected and has received a $100 million debtor-in-possession financing commitment from its existing lenders.
“This restructuring is the best path forward for Red Lobster,” said CEO Jonathan Tibus. “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.”
Court filings and information about the claims process can be found at a separate website maintained by Red Lobster’s claims agent, https://dm.epiq11.com/RedLobster.
