Red Lobster, the seafood restaurant chain, is searching for a buyer to avoid falling into bankruptcy, just a week after it was first reported that the company was struggling financially.
As debts mount at the fast-casual dining company, it has been forced to consider a Chapter 11 filing.
However, the chain is also considering finding a buyer and has been involved in a sales process over the recent months.
At least one company was believed to have been interested in buying the 649-restaurant strong chain but an agreement failed to materialize.
Red Lobster had teetered on the edge of bankruptcy during the pandemic but now high-cost long-term leases and increased labour costs could be the final blow to the all-you-can-eat shrimp server.
Even if a takeover does take place, it would be difficult for a new buyer to find a way to deal with the leases without slipping into bankruptcy, reports argued.
Before the group files for bankruptcy, it will undergo restructuring discussions with its owner Thai Union Group, lender Fortress Investment Group and law advisor King & Spalding.