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Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

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Red Lobster seeks bankruptcy
Red Lobster seeks bankruptcy | AP

With innovations like popcorn shrimp and “endless” seafood offers, Red Lobster, the casual dining restaurant that popularized seafood, has filed for Chapter 11 bankruptcy protection.

The 56-year-old chain filed late on Sunday following the closure of numerous locations.

“Red Lobster’s best course of action in the future is this restructure. CEO Jonathan Tibus stated, “It enables us to overcome multiple operational and financial obstacles and come out stronger and refocused on our growth.” Expert in corporate reorganization, Tibus assumed the company’s senior position in March.

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | Pixa Bay Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

Red Lobster announced that its restaurants will stay open during the bankruptcy process, which aims to streamline operations, close locations, and explore a sale. As part of the filing, Red Lobster entered into a “stalking horse” arrangement, which means it intends to sell the company to a company created and managed by its lenders.

According to Aaron Allen, the founder of the restaurant consulting business Aaron Allen & Associates,s bankruptcy was the result of two decades of problems for the company. The company has faced rising competition from quicker-moving, less expensive restaurants like Panera and Chipotle.

Red Lobster occasionally drops its prices to compete, a frequently catastrophic strategy. When crab prices increased in 2003, the company lost millions of dollars on an all-you-can-eat “Endless Crab” campaign, according to Allen. Twenty years later, the chain repeated the same strategy with an “Ultimate Endless Shrimp” campaign.

“It’s an interesting case study in corporate food service that they would have this kind of corporate amnesia,” Allen remarked.

He claimed it saw greater success after Red Lobster rebranded itself as an upscale eatery in the middle of the 2000s. It remodeled stores and increased pricing. However, it continued to face challenges from shifting consumer preferences and growing labor and leasing expenses.

Allen stated, “This slow-moving train wreck has been in motion for the past 20 years.”

Based in Orlando, Florida, Bill Darden started the resturant to lower costs and increase the accessibility of seafood restaurants for families.

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | AP Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

In 1938, Darden launched The Green Frog in Waycross, Georgia, marking his entry into the restaurant industry. Even though it was against the law then, he dared not separate the restaurant’s guests based on race. Again, he let patrons seat wherever they pleased when he launched the first location in Orlando in 1968.

In 1970, Darden sold it to General Mills, where he remained an executive and continued to operate restaurants. Afterward, General Mills founded Darden Restaurants, which owns Olive Garden and several other brands. In 1995, Darden Restaurants separated from General Mills.

Red Lobster attracted hordes of devotees for meals like lobster linguini and its buttery Cheddar Bay biscuits

Nobody who was born in the world could not enjoy Red Lobster cheddar biscuits. In her memoir “Bossypants,” comedian and actress Tina Fey stated, “Anyone who claims otherwise is a liar and a socialist.”

However, the restaurant needed help to attract younger patrons and stay competitive with other eateries. In 2014, Darden Restaurants sold to a private equity firm. One of the biggest seafood suppliers in the world, Thai Union Group, made its initial investment in Red Lobster in 2016 and increased it again in 2020.

Then, during its “Ultimate Endless Shrimp” promotion last fall, they lost millions of dollars by charging $20 for an all-you-can-eat shrimp feast.

In an earnings call with investors, Thai Union Group’s chief financial officer, Ludovic Garnier, stated, “We knew the price was cheap, but the idea was to bring more traffic in the restaurants.

Garnier reported that restaurant traffic increased as a result of the transaction. However, more customers than Red Lobster had anticipated chose the $20 offer, and “we don’t earn a lot of money at $20,” he said. Thai Union Group reported a $19 million loss from Red Lobster for the first nine months of 2023.

Thai Union Group declared in January that it would sell its minority stake in Red Lobster. According to CEO Thiraphong Chansiri, the COVID-19 epidemic, business challenges, and growing operating expenses have severely impacted the restaurant chain and resulted in “prolonged negative financial contributions to Thai Union and its shareholders.”

Red Lobster seeks bankruptcy

Red Lobster seeks bankruptcy | AP – VOR News Image

Red Lobster Seeks Bankruptcy Protection Days After Closing Dozens Of Restaurants

According to a statement made last week by restaurant liquidator TAGeX Brands, the equipment from more than 50 recently closed Red Lobster locations will be up for sale. As a result of the restaurant closures, which are occurring in over 20 states, Red Lobster’s footprint is being diminished in places such as Denver, San Antonio, Indianapolis, and Sacramento, California.

Allen anticipates that due to the bankruptcy proceedings, 700-restaurant network will decrease by one-third to half. All that many prospective purchasers seek is the chain’s real estate.

He predicted the buyer would likely want to keep Red Lobster the same.

In the court statement, Red Lobster stated that its assets are believed to be between $1 billion and $10 billion, with over 100,000 creditors. The corporation’s liabilities are between $1 billion and $10 billion.

SOURCE – (AP)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

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Starbucks | PixaBay Image

Washington: In a decision sparked by a labor dispute with Starbucks, the Supreme Court on Thursday made it more difficult for the federal government to obtain court orders when it suspected a corporation of meddling in unionization efforts.

The justices raised the bar on when a federal court may require worker jobs to be protected during a union organizing drive.

A higher standard, pushed by Starbucks that must be satisfied in most other disputes over court orders or injunctions, was favored by the court unanimously over a provision that some courts had applied to orders requested by the National Labour Relations Board.

starbucks

Starbucks | PixaBay Image

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

The National Labour Relations Act, which controls the agency, has, the NLRB had contended, permitted judges to issue temporary injunctions for over 75 years if they determined that the requests were “just and proper.” According to the agency, the statute was meant to restrict the power of the courts and does not need it to demonstrate any additional elements.

“Consistent federal standards are important in ensuring that employees know their rights and consistent labour practices are upheld no matter where in the country they work and live,” Starbucks stated after the ruling.

However, Lynne Fox, head of the union representing the workers, claimed that Starbucks should have abandoned the lawsuit as part of its more accommodating stance on union organizing initiatives. When their employers disobey the law, working people have very few options for self-defense. That makes today’s Supreme Court decision especially horrible, said Workers United president Fox.

Starbucks fired seven employees in February 2022 for attempting to organize their Tennessee location. The matter moved through the agency’s administrative procedures while the NLRB won a court order requiring the employer to rehire the employees. Two years may pass during such procedures.

starbucks

Starbucks | AP news image

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

Starbucks was ordered to rehire the employees in August 2022 by a temporary injunction issued by a district court judge who concurred with the NLRB. Starbucks appealed to the Supreme Court following the upholding of that decision by the 6th U.S. Circuit Court of Appeals.

According to Workers United, the union organizing Starbucks workers, five of the seven workers are still employed at the Memphis store, while the other two continue involved with the organizing campaign. The Memphis store voted to unionize in June 2022.

As the case proceeded, antagonism between Workers United and Starbucks began to dissolve. The two parties declared in February that they would reopen talks to complete contract agreements this year, and they convened their first bargaining session in nearly a year in late April.

starbucks

Starbucks | PixaBay Image

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

According to the NLRB, workers at 437 company-owned U.S. Starbucks cafes have voted to unionize since late 2021, but none of those stores has achieved a labor agreement with Starbucks.

Starbucks said it’s pursuing its goal of obtaining finalized contracts for those outlets this year.

SOURCE – (AP)

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Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

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Musk | AP News Image

SAN FRANCISCO — Elon Musk dismissed his lawsuit against OpenAI just before a scheduled hearing on Wednesday.

Musk

Musk | Euro News Image

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

Musk sued the San Francisco artificial intelligence business and its CEO Sam Altman in February, accusing them of betraying the ChatGPT maker’s basic goals of serving humanity rather than maximising profits.

In the February lawsuit filed in San Francisco Superior Court, billionaire Musk claimed that when he bankrolled OpenAI’s creation, he reached an agreement with Altman and the president, Greg Brockman, to keep the AI company as a nonprofit that would develop technology for the public’s benefit and keep its code open rather than walling it off for private profit.

musk

Musk | AP News Image

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

However, Musk claimed in the complaint that by embracing a tight relationship with Microsoft, OpenAI and its top executives “aflame” that pact and are “perverting” the company’s objective.

Most legal experts believe Musk’s accusations, which revolve around allegations of breach of contract, breach of fiduciary duty, and unfair business practices, are unlikely to succeed in court. Musk’s attorney submitted a notice on Tuesday seeking to dismiss the entire case. There was no explanation for why it was being dropped.

musk

Musk | AP news Image

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

Musk’s lawyers and OpenAI did not immediately return calls for comment.

SOURCE – (AP)

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American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

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Martin Shkreli | AP News Image

NEW YORK — Martin Shkreli, an American investor, is facing a new lawsuit for allegedly storing and sharing recordings from a unique Wu-Tang Clan album that he was forced to sell after being convicted of securities fraud in 2017.

PleasrDAO, a cryptocurrency collective, filed the case on Monday after paying Shkreli $4.75 million for the only known copy of the album. The record, “Once Upon a Time is Shaolin,” has remained unreleased to the public, serving as a rare contemporary art piece since it was auctioned off by the renowned hip-hop group in 2015.

PleasrDAO accused Shkreli of violating their agreement by retaining digital copies of the album and circulating them extensively among his social media followers in a lawsuit filed in federal court in Brooklyn, New York.

shkreli

Shkreli | AP News Image

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

They allude to his recent social media posts boasting of distributing the digital recordings to “thousands of people.” According to the lawsuit, Shkreli played bits of the album during a livestream he hosted on X over the weekend, referring to it as a “Wu tang official listening party.”

Shkreli has not responded to a request for comment.

The lawsuit is the latest twist in a unique record created in protest of music’s devaluation in the streaming era but purchased at auction by Shkreli, a man infamous for inflating the price of a life-saving prescription and his “Pharma Bro” reputation.

shkreli

Shkreli | Coin Base Image

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

Following his conviction on securities fraud charges, Shkreli was compelled to sell the CD, which came in a hand-crafted silver and nickel casing and included a 174-page leather-bound book.

PleasrDAO stated that it purchased both the physical copy of the record and its digital rights in two transactions, in 2021 and 2024. They stated that Shkreli had erased all traces of the album’s files.

“Any dissemination of the Album’s music to the general public greatly diminishes and/or destroys the Album’s value, and significantly damages PleasrDAO’s reputation and ability to commercially exploit the Album,” the complaint claims.

shkreli

Shkreli | SF Gate Image

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

As of last month, the record was on its way to Australia’s Museum of Old and New Art, which announced that it would begin hosting private listening sessions this week showcasing chosen album tracks.

SOURCE – (AP)

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