Red Lobster, which filed for Chapter 11 bankruptcy nearly two months ago, announced at a court hearing on 10 July that it is considering reorganizing instead of selling the company. The Orlando-based chain, operating 570 restaurants, is still exploring a sale to its biggest creditor, Fortress Credit, or other buyers. However, reorganization might save “millions of dollars,” according to Jeff Dutson from King & Spalding, representing Red Lobster. The company plans to decide by 19 July whether to proceed with reorganization or the previously planned auction on 25 July. Both the term lenders and the unsecured creditors committee (UCC) support reorganization, which could simplify processes like transferring liquor licenses. U.S. Bankruptcy Judge Grace Robson agreed that reorganization could benefit creditors. Additionally, Red Lobster is making progress in negotiating leases to keep as many locations open as possible and expects to file related documents by the end of July.
