In a plot twist that could soften even the hardest crustacean shell, Red Lobster is facing stormy seas of financial turmoil, threatening to yank 135 more restaurants from the seafood chain’s menu of offerings. The beloved purveyor of everything deep-fried and butter-drenched is grappling with bankruptcy and potential mass closures, casting a net of worry over its loyal patrons.

Red Lobster has flagged 228 leases as money-losing propositions. Apparently, the red ink is running as deep as the ocean, with already 99 locations shuttered across 28 states. In an effort to keep the ship afloat, the chain is eyeing deals to renegotiate leases or face closing even more locations.

The financial woes culminated in a Chapter 11 bankruptcy filing in Florida on May 19, 2024. In corporate speak, Chapter 11 is essentially a time-out for companies to figure out why they're sinking without getting eaten by the sharks of liquidation. If leases can't be renegotiated to favorable terms, the anchor might drop on an additional 135 restaurants.

Adding salt to the wound, Red Lobster has a seaworthy $76 million net loss recorded for 2023. Of course, numbers like these aren’t exactly what you want to see on a check when you’re trying to order another basket of cheddar bay biscuits.

Unsurprisingly, the Times Square location—infamous for its neon lights and tourist traps—finds itself on the chopping block. With an annual rent of $2.2 million, one can’t help but wonder if Captain Ahab himself made the financial projections for this flagship site.

Throwing another shrimp on the barbie didn’t quite work out as planned. Red Lobster's owners from the Thai Union are under scrutiny for their role in the financial quagmire. A particularly costly hiccup involved an "endless shrimp" promotion that sank the company an additional $11 million. In the world of optics, endless shrimp are great; endless losses? Not so much.

The choppy waters extend back through the first nine months of 2023, during which Red Lobster logged a $19 million loss. Closure, auction, and liquidation seem to be words frequently overheard in the boardroom these days. The plans involve auctioning equipment from nearly 50 closing restaurants, perhaps giving new meaning to "cash on the half shell."

Red Lobster remains proactive, at least in intent if not in execution. Stepping up to the plate, or rather the trough, is CEO Jonathan Tibus, a managing partner at Alvarez & Marsal, known for his talent in restructuring corporate entities. (Read: A professional at getting companies out of boiling water). Tibus' task? To resurrect Red Lobster into a leaner, meaner steamed cuisine machine.

Meanwhile, specific locations are being identified for potential shutdown amidst the turmoil. Currently, Red Lobster operates around 550 restaurants in the US, with an additional 54 locations dotted across the globe. But these numbers hang precariously in the balance, much like a lobster on the edge of a pot, contemplating the simmering waters below.

The next few months will be crucial for the chain as it navigates renegotiations, restructuring, and potential reductions in the number of eateries. Whether Red Lobster claws its way back to financial health or sinks further remains to be seen, but one thing is sure: this is one sea story that’s making waves from coast to coast.