Seafood chain Red Lobster will ask Canadian court to enforce U.S. bankruptcy in Canada

Days after Red Lobster filed for Chapter 11 bankruptcy and announced that it would close dozens of its seafood restaurants, the chain’s Canadian counterpart will ask a Canadian court to enforce the U.S. bankruptcy in Canada, CBC News has learned.

An application will be brought before the Ontario Superior Court of Justice on May 28 to have the U.S. bankruptcy recognized and enforced in Canada, Canadian counsel Linc Rogers confirmed to CBC News on Thursday.

Red Lobster Canada, Inc., a Delaware-incorporated company that owns and operates Red Lobster restaurants across Canada, was part of the Chapter 11 filing in the U.S. It’s listed as a “related debtor” in the filing.

“There is currently a stay in proceedings in place in Canada preventing any creditor from taking action in Canada against [Red Lobster] Canada and certain affiliated entities,” Rogers wrote.

The casual dining chain, which at its peak operated 700 restaurants across the U.S. and Canada, posted major financial losses in the U.S. in late 2023 — partly due to an all-you-can-eat-shrimp promotion that became a permanent staple of its menu last summer.

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Court filings showed that Red Lobster was investigating the role that seafood supplier Thai Union, which held a minority stake in the company, played in the promotion that caused $11 million US in losses.

A spokesperson for Thai Union told CBC News last month that it had exited its investment in Red Lobster and would not comment further.