economy
Red Lobster's Ultimate Endless Shrimp promotion described as a 'car crash' for the company, lawsuit says
"Thai Union doubled down on a campaign to squeeze out every drop of value that it could," creditors said
TL;DR
- Creditors are suing former controlling shareholder Thai Union over Red Lobster's financial struggles.
- The lawsuit alleges Thai Union exploited Red Lobster through uneconomic contracts, including the "Everyday $20 Ultimate Endless Shrimp" promotion.
- Thai Union is accused of forcing Red Lobster to buy shrimp at above-market prices and banning competitors.
- The promotion allegedly caused restaurants to run out of shrimp, unable to turn over tables.
- Red Lobster filed for bankruptcy in May 2024, citing various financial headwinds and the fallout from the shrimp promotion.
- Thai Union divested its stake in Red Lobster in May 2024 and allegedly did not contribute capital during the Chapter 11 process.
- Red Lobster was acquired and exited Chapter 11 in September 2024.