Ontario Judge’s Order Protects Red Lobster’s Canadian Business Against Bankruptcy
An Ontario judge has issued an order that protects Red Lobster’s Canadian assets from U.S. bankruptcy proceedings.
Judge Michael Penny granted a request for the order from lawyers representing the financially troubled seafood chain’s Canadian business, the Canadian Press reported. The lawyers told the judge that Red Lobster is trying to stabilize its operations.
The order prevents creditors from seizing Red Lobster’s Canadian assets in order to recoup outstanding debts. The move came after the firm’s Florida-based parent filed for Chapter 11 bankruptcy in the U.S. and closed numerous restaurants.
The parent firm announced that it intends to use the proceedings to “pursue a sale of substantially all of its assets as a going concern.”
Red Lobster expanded into Canada in 1983. The firm’s Canadian subsidiary has 2,000 mostly part-time and non-unionized Canadian employees, CP reported.
Red Lobster Canada operates 27 locations in Ontario, Alberta, Saskatchewan and Manitoba.
All but two of the chain’s Canadian properties are leased, while two in Brantford, Ont., and Toronto’s Etobicoke area are owned. The company owns the Etobicoke location’s building, but not the land, according to CP.
Jonathan Tibus, a U.S.-based managing director with restructuring advisory firm Alvarez & Marsal, is serving as Red Lobster’s CEO during the asset sell-off.
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- ◦Lease
- ◦Sale/Acquisition
- ◦Financing