Crimson Lobster employed a liquidation firm on brief discover earlier than unexpectedly closing dozens of areas this week — and is anticipated to file for chapter as early as Monday, The Publish has discovered.
Public sale firm TAGeX Manufacturers was retained “very just lately” to unload the furnishings and gear at 50 of the shuttered Crimson Lobster eating places, the agency’s founder Neal Sherman instructed The Publish.
“We’ve by no means seen as many areas be closed and auctioned off on the identical time and we’ve been doing this for 37 years,” mentioned Sherman, including that remaining bids are due Thursday.
The nation’s largest seafood chain — recognized for its all-you-can-eat shrimp deal — just lately knowledgeable distributors {that a} Chapter 11 submitting was imminent after it had did not discover a purchaser or reel in new buyers, in line with a chapter lawyer with data of the scenario.
“They’ve been planning to file for a while,” the lawyer, who mentioned he spoke with one giant vendor, instructed The Publish.
The Orlando, Fla.-based firm, which had 650 areas nationwide earlier than the sudden closures, has been mulling submitting for chapter, as The Post reported last month.
Late Tuesday, the Wall Avenue Journal reported that Crimson Lobster plans to file for chapter earlier than Memorial Day and can use the method to get out of onerous contracts with landlords.
The transfer might trim a whole lot of tens of millions of {dollars} in debt, in line with the outlet.
The anticipated chapter submitting comes after the struggling chain locked out a whole lot of employees who had proven up for work and had been greeted with an indication saying that their restaurant was closed.
Restaurant Enterprise Journal reported 99 areas had been closing.
Crimson Lobster has been struggling for years, however the remaining straw seems to have been a money-losing $20 all-you-can-eat shrimp promotion final summer season, which price the corporate $11 million.
The corporate’s largest shareholder — Thai Union, a publicly held firm with a 49% stake — announced in January that it might be exiting its funding shortly after the shrimp fiasco.
The Bangkok-based seafood provider raised the worth of the shrimp deal by $5 by the autumn, however nonetheless misplaced cash on the promotion.
“We knew the worth was low cost, however the thought was to convey extra visitors within the eating places,” Thai Union chief monetary officer Ludovic Garnier mentioned on an earnings name. “We must be far more cautious concerning what are the entry factors and what’s the worth level we’re providing for this promotion.”
Thai Union, which purchased into the model in 2016 and elevated its stake in 2020, took a $530 million write-down on its funding, the corporate mentioned.
