Red Lobster’s endless shrimp deal that doomed chain was a ‘car crash’ waiting to happen: lawsuit

Red Lobster’s endless shrimp deal that doomed chain was a ‘car crash’ waiting to happen: lawsuit New lawsuit claims Red Lobster’s former majority shareholder signed contracts that made ‘no economic sense’ - Bookmark - CommentsGo to comments A new lawsuit claims Red Lobster’s “disastrous” endless shrimp deal was a “car crash” that left restaurants across the U.S. “immobilized.” Red Lobster’s creditors have filed a lawsuit in Orange County, Florida, against Thai Union, the seafood chain’s former majority shareholder, and other executives. The complaint, which was first reported by Bloomberg, alleged the Thailand-based company worked to “squeeze out every drop of value” from Red Lobster through contracts that made “no economic sense” for the chain. “Thai Union treated the Company as little more than a distribution arm for its own products, milking whatever value it could from Red Lobster, especially as the Company became insolvent,” the lawsuit said. The creditors also hit out at Thai Union over its “Everyday $20 Ultimate Endless Shrimp” offering, which has been widely blamed for the chain’s decision to file for Chapter 11 bankruptcy in 2024. Red Lobster had a long history of running limited-time endless shrimp promotions, but the lawsuit claims Thai Union’s decision to make the deal permanent in 2023 was “disastrous.” The company’s “Everyday $20 Ultimate Endless Shrimp” offering turned a “successful legacy Red Lobster Strategy” into a “car crash,” the lawsuit said. The creditors also claim restaurants across the U.S. were “immobilized as they ran out of shrimp and were unable to turn over tables.” The chain lost $11 million in a single quarter from the deal, the New York Post reports. “The Everyday $20 Ultimate Endless Shrimp deal represented not a single irresponsible decision by Thai Union-led management (although it was that), but rather, the culmination of Thai Union's efforts to steer Red Lobster to prioritize its shrimp offerings,” the complaint said. The lawsuit calls for a jury trial to determine the amount of damages owed to the creditors. Red Lobster creditors say they were owed about $295 million when the chain filed for bankruptcy, according to the Post reports. The Independent has contacted Thai Union and Red Lobster for comment. Thai Union first bought stake in Red Lobster in 2016 and obtained majority control in 2020. The company divested from Red Lobster in May 2024, around the same time the chain began bankruptcy proceedings. The chain has since closed dozens of locations across the U.S. Red Lobster announced in April that it brought back endless shrimp offerings at select restaurants for a limited time. The deal included a new “Marry Me Shrimp” dish, which featured “tender shrimp in a tomato cream sauce, topped with a garlic and herb crumble.” “This is about putting our guests first and bringing back something they truly love,” Red Lobster CEO Damola Adamolekun said in a release. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments