Red Lobster Management LLC and its affiliated debtors confirmed their joint Chapter 11 plan on September 5, 2024 Dkt. 1140, with the plan becoming effective on September 16, 2024 Dkt. 1177. A final decree entered December 27, 2024 closed all affiliate cases except the RLSV, Inc. case, which remains open for residual administration.
The debtors filed on May 19, 2024 Dkt. 1 in the Middle District of Florida after several years of accelerating operational decline. The first-day declaration Dkt. 6 describes guest counts falling approximately 30% since 2019, consolidated adjusted EBITDA declining more than 60% on a trailing-twelve-month basis, and a $76 million net loss for fiscal year 2023. Cash fell from roughly $100 million in May 2023 to below $30 million within approximately six months, driven by operating losses, $32 million in interest payments, and a $27 million paydown triggered by a decline in the ABL borrowing base. The company closed 93 underperforming locations on May 13, 2024, six days before filing. The prepetition capital structure consisted of approximately $264.7 million outstanding under a term loan facility with Fortress Credit Corp. as administrative agent, plus $29.3 million in outstanding letters of credit under a $100 million ABL commitment.
The case proceeded through a lender-driven restructuring path anchored by a restructuring support agreement executed with the prepetition term loan lenders on May 9, 2024. The court entered the final DIP order Dkt. 393 and bidding procedures order Dkt. 386 on June 14, 2024. The DIP package authorized up to $275 million in postpetition financing — $100 million in new money and $175 million in roll-up term loans at a 1.75:1 conversion ratio. RL Purchaser LLC, an entity controlled by the DIP lenders, served as the stalking horse bidder with the right to credit bid all or part of its DIP claims. When no qualifying topping bid emerged by the July 18 deadline, the debtors pivoted from a standalone Section 363 closing to a reorganized-equity sale implemented through the plan.
The official committee of unsecured creditors, led by Pachulski Stang Ziehl & Jones, contested the DIP package early in the case, challenging the $175 million roll-up, the milestone structure, and the scope of adequate-protection treatment Dkt. 350. The U.S. Trustee separately objected to plan provisions that would have exempted the GUC trust, GUC trustee, reorganized debtors, and the purchaser from quarterly fee obligations until case closure Dkt. 1011. The plan as confirmed channels holders of allowed Class 4 general unsecured claims into a GUC trust, where they receive a pro rata share of 40% of net proceeds recovered from specified litigation assets contributed to the trust on the effective date.
Post-confirmation, the debtors moved for a final decree in December 2024, which the court granted Dkt. 1549, closing all affiliate cases except RLSV, Inc. and directing future matters to that docket. A January 2026 motion to reopen the lead case was denied on that basis Dkt. 1564, and a renewed motion to reopen was filed on February 3, 2026 Dkt. 1569.
