Red Lobster files for Chapter 11 bankruptcy

(NBC, KYMA/KECY) - Red Lobster has filed for Chapter 11 bankruptcy after failing to return to pre-pandemic sales levels.

The company confirmed the move in a statement Sunday, but added it is continuing the process to shrink its footprint while searching for a buyer.

The seafood chain said it does have a bid in house from an existing lender, but is looking for better offers.

Red Lobster currently operates 551 locations in the U.S. and 27 in Canada, and those will remain open for now. However, it did close 93 underperforming stores in May, and is asking a bankruptcy court to reject 108 more of its leases to further slim down its footprint.

The company was founded in 1968 and employs about 36,000 employees.

It reported a loss of $76 million last year, partly due to a disastrous "endless shrimp" promotion that benefitted Thai Union, its sole shrimp provider and a partial owner of the company, while damaging the restaurant's bottom line.

The bankruptcy petition lists its assets as worth between $1 billion and $10 billion.