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Red Lobster's Bankruptcy Announcement Has Sent The Internet Into A Tailspin, And One Theory As To Why They Filed Is...Mind-Boggling

BuzzFeed
·4 min read

On Sunday, Red Lobster announced it would officially file for Chapter 11 bankruptcy. The news comes after the closure of over 100 of its locations, many of which were completely gutted and their contents auctioned off, including lobster tanks, industrial ovens, patio heaters, and, in some cases, the whole restaurant. Some former Red Lobster employees even claimed they received no notice of these closures and walked into locked or empty restaurants.

Sign above Red Lobster restaurant entrance displaying a red lobster logo and the words "Red Lobster Fresh Fish Live Lobster."
Chuck Bennett / Getty Images

While it may come as a shock to many die-hard Cheddar Bay Biscuit fans, the seafood chain has been struggling for some time now. Sales have been down for a few years (with a big decline in the last 12 months). In 2014, private equity firm Golden Gate Capital struck a deal to purchase Red Lobster from Darden Restaurants (who own Olive Garden and LongHorn Steakhouse). The firm sold the chain's real estate assets in a sale-leaseback agreement, meaning Red Lobster would have to start paying rent on properties they could no longer afford.

Sign on a window with a lobster logo stating, "This location is closed. We look forward to serving you at another Red Lobster location in the future. UPS, please pick up at back door."
Paulmckinnon / Getty Images

Then came the all-you-can-eat shrimp. In 2023, Red Lobster brought back the old promotion, which allowed customers to order an unlimited number of select shrimp dishes for just $20. In an interview with Slate, one former employee recounted someone ordering 16 rounds of shrimp scampi and camping out at their table for two hours. Another employee recalled watching a diner consume 30 rounds of fried shrimp in four hours.

Interior of a Red Lobster restaurant with empty wooden booths and tables, dim lighting, and nautical-themed decorations on the walls
Brandon Bell / Getty Images

Despite bringing in more foot traffic, the promotion cost the chain $11 million in quarterly losses. But it turns out there's more to the shrimp-fueled chaos than meets the eye. In 2020, major seafood supplier Thai Union became Red Lobster's majority shareholder and thought the promotion would help offload the tons of shrimp they had on hand. During their time running the chain, they also allegedly ousted two rival suppliers and faced a lot of executive turnover.

Red Lobster sign with text "FRESH FISH. LIVE LOBSTER" against a clear sky

Long story short, there were a lot of factors that ultimately contributed to this decision. Whatever the cause of Red Lobster's downfall, the news has fueled concerns from restaurant-goers on X (formerly Twitter) as they struggle to cope with the news.

Tweet by TSS | Koopa (@KoopaNJ) reads, "taking the rest of the day off. Dont text," replying to a tweet by Dexerto (@Dexerto) that reads, "Red Lobster has filed for bankruptcy."
A tweet by conure (@conureCC) read: "western civilization has fallen" in reference to a tweet by Dexerto (@Dexerto) announcing that Red Lobster has filed for bankruptcy

@AINJELMusic / Via Twitter: @AINJELMusic

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Everyone's main concern? No longer having access to Cheddar Bay Biscuits.

@D4RKTR1CKZ / Via Twitter: @D4RKTR1CKZ

Nathan tweets, "If I lose Cheddar Bay Biscuits I will become ungovernable," responding to a Dexerto tweet stating, "Red Lobster has filed for bankruptcy."
Nicolas Cage holding a framed document with text, caption reads, "We have to retrieve the Cheddar Bay Biscuit recipe."
Tweet by Mina offering $20 and signing an NDA for Red Lobster's cheddar biscuit recipe after learning they filed for bankruptcy from Dexerto's tweet

Even Beyoncé is getting roped into the drama.

@geolojosh_ / Via Twitter: @geolojosh_

(Her song, "Formation," features the lyric, "When he fuck me good, I take his ass to Red Lobster.")

Tweet from account @clownary: "beyoncé and jay know what they have to do to save red lobster" over an embedded tweet from @Dexerto: "Red Lobster has filed for bankruptcy"

But don't worry, friends: Filing for Chapter 11 bankruptcy doesn't mean Red Lobster is gone for good. In a statement posted to X and Instagram, Red Lobster clarified, "Filing for bankruptcy does not mean we are going out of business. In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost structure so that Red Lobster can continue as a stronger company going forward."

Red Lobster / Via Twitter: @redlobster

According to the IRS, filing for Chapter 11 bankruptcy means that "The debtor uses the time from their bankruptcy filing to the confirmation of their debt repayment plan to reorganize their finances."

Relief quickly flooded the comment section as folks expressed their support and shared their personal Red Lobster stories.

Comments about Red Lobster on social media. Comments praise Red Lobster's cheddar bay biscuits, customer letters, and express support.
Red Lobster / Via instagram.com

It's not clear what's next for Red Lobster, but it looks like our Cheddar Bay Biscuits are safe (for now).

@RStickel24 / Via Twitter: @RStickel24