That is just a recent convenient excuse. An $11m loss on a company the size of red lobster is peanuts if it was healthy
This is a seriously low effort excuse.
The chain was bought in 2014 by Golden Gate Capital. An investment firm that specializes in leveraged buyouts. Golden Gate purchased the company with borrowed money, then assigned the debt load to the company. These debts are usually assigned to actual assets. Red Lobster then had to make enough profit to cover the massively increased debt load. Aka a ticking timebomb of failure.
Golden Gate then sold the company to it’s current owners.
This bankruptcy is about screwing over the non-secured debt (mostly suppliers) and fucking over employees (layoffs, pay freezes, and reduction in staffing), while the executives suck every last bit of money out of the operation.
That is just a recent convenient excuse. An $11m loss on a company the size of red lobster is peanuts if it was healthy This is a seriously low effort excuse.
The chain was bought in 2014 by Golden Gate Capital. An investment firm that specializes in leveraged buyouts. Golden Gate purchased the company with borrowed money, then assigned the debt load to the company. These debts are usually assigned to actual assets. Red Lobster then had to make enough profit to cover the massively increased debt load. Aka a ticking timebomb of failure.
Golden Gate then sold the company to it’s current owners.
This bankruptcy is about screwing over the non-secured debt (mostly suppliers) and fucking over employees (layoffs, pay freezes, and reduction in staffing), while the executives suck every last bit of money out of the operation.