According to a new report, the seafood restaurant chain Red Lobster is considering filing for bankruptcy to relieve financial pressures that it’s faced.
The report comes from Bloomberg, which cited those familiar with the internal discussions of the restaurant chain.
Red Lobster is considering whether or not it should file Chapter 11 bankruptcy to address long-term contracts, renegotiate some of its leases, and confront rising labor costs, the report said.
Bloomberg says the restaurant chain is discussing its options with a law firm, but that no decision has been made at this time.
If Red Lobster does decide to file for Chapter 11 bankruptcy, it would be able to continue operations as it works with creditors and investors to put a debt reduction plan in place.
Red Lobster has not commented on the report at this time.
Earlier this year, the company that owns the majority stake in Red Lobster, Thai Union, said it was planning to exit its investment in the restaurant and take a write-off, Fox Business reported.
This came after Thai Union shared in a regulatory filing that the restaurant chain was facing “ongoing financial requirements no longer align with Thai Union's capital allocation priorities.”
Last month, Jonathan Tibus was brought in as Red Lobster’s new CEO.