Red Lobster bankruptcy driven by corporate owner forcing it to source its seafood?

[exboyfil]

Last edited Wed May 22, 2024, 10:38 AM - Edit history (1)

"Red Lobster CEO Jonathan Tibus wrote in court documents the Endless Shrimp offer was originally intended to be a limited-time promotion. However, in May 2023, Paul Kenny, Red Lobster’s CEO at the time, made the decision to add the promotion to the chain’s menus permanently, priced at USD 20.00 (EUR 18.41), “despite significant pushback from other members of the company’s management team,” Tibus said.

“This decision created both operational and financial issues for the debtors … saddling the company with burdensome supply obligations, particularly with its equity sponsor: Thai Union,” Tibus said.

Red Lobster is investigating the circumstances around these decisions, including whether Kenny’s decision-making process circumvented the company’s normal supply chain and demand planning processes.

Red Lobster’s supply process was strained by virtue of its relationship with Thai Union, according to Tibus. In addition to being the company’s equity sponsor and 100 percent owner of Red Lobster Master Holdings GP, Thai Union is a primary supplier of seafood to Red Lobster."

Investing story that involves foreign ownership of a traditional American brand (Red Lobster is about the only place you can dine out on seafood in many locations in the midwest). We don't have a comparable restaurant in our area so it is now an hour plus drive to the nearest Red Lobster.

Got to wonder if the bankruptcy will be limited to Red Lobster alone or the debtors will attempt to pierce the corporate veil to Thai Union.


https://www.seafoodsource.com/news/business-finance/red-lobster-files-for-bankruptcy-says-it-s-investigating-thai-union-s-undue-influence-in-shrimp-purchasing-decisions