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Ontario judge to uphold Red Lobster’s U.S. bankruptcy case in Canada

Written by on May 28, 2024

TORONTO — An Ontario judge says he will issue an order later today that recognizes and enforces Red Lobster’s U.S. bankruptcy protection proceedings in Canada.

The forthcoming order from judge Michael Penny comes at the request of lawyers for the beleaguered seafood restaurant chain’s Canadian operations, who told a virtual court they are working to “stabilize” the business.

An affidavit from the chief executive of Red Lobster Management LLC filed in an Ontario court says the goal of the U.S. proceedings is to orchestrate a sale of most or all of the company’s assets, including those owned by Red Lobster Canada.

The filing from Jonathan Tibus says the company operates 27 Canadian locations across Ontario, Alberta, Manitoba and Saskatchewan and has 2,000 Canadian employees, who are mostly part-time and non-unionized.

Last week, an Ontario court granted Red Lobster Canada a stay in proceedings, which prevents creditors from taking action against it.

Florida-based Red Lobster Management LLC shuttered dozens of locations in the U.S. this month as it grappled with rising costs and more competition, eventually leading it to file for Chapter 11 bankruptcy protection.

This report by The Canadian Press was first published May 28, 2024.

The Canadian Press