The Red Lobster on Prospect Avenue in Champaign may soon shut its doors if the company fails to renegotiate its leases, according to a list of potential closures published by CNN on Thursday.
The restaurant became the largest seafood chain in the world by bringing affordable shrimp and lobster to middle-class America before filing for Chapter 11 bankruptcy last month.
According to CNN, Red Lobster said it has more than $1 billion in debt and less than $30 million in cash on hand. The company plans to sell its business to its lenders, and in exchange, it will receive financing to remain in business. As part of its restructuring plan, Red Lobster intends to close dozens of its nearly 700 restaurants.
In a press release announcing its bankruptcy, the company cited significant financial challenges. In preparation for the announcement, Red Lobster closed approximately 50 locations across America. A new list of locations in danger of closing, including the Champaign location, was revealed in court filings last week.
Despite the closures, Red Lobster’s management remains hopeful about the future.
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“This restructuring is the best path forward for Red Lobster,” Jonathan Tibus, CEO of the company, wrote in the press release. “It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.”
