Casual seafood dining chain Red Lobster has filed for bankruptcy protection.
Red Lobster management intends to use the bankruptcy proceedings to improve operations and close some locations.
It plans to sell its business to an entity formed and controlled by its existing lenders.
Red Lobster's restaurants will remain open and operating as usual during the Chapter 11 process, the company says.
The company said its estimated liabilities were between $1 billion to $10 billion, according to Axios.
The company said it has received a $100 million financing commitment from its existing lenders to fund operations.
"This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth," CEO Jonathan Tibus said.
"The support we've received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests."
Red Lobster shuttered nearly 100 locations a week ago, following massive losses, blindsiding many employees.
The bankruptcy comes after Red Lobster reported it lost a record $12.5 million during the fourth quarter of 2023, following a third-quarter loss of about $11 million.
In November, Chief Financial Officer Ludovic Garnier of parent company Thai Union Group said last year's decision to make Ultimate Endless Shrimp a permanent menu item instead of a seasonal promotion was a key factor for the loss.
"We knew the price was cheap, but the idea was to bring more traffic in the restaurants," Garnier told investors during a conference call. "So we wanted to boost our traffic, and it didn't work."
