Two days after it declared Chapter 11 bankruptcy, Orlando-based Red Lobster sent a letter Tuesday to customers assuring them that most of its restaurants would stay open despite the company’s financial troubles.

“Bankruptcy is a word that is often misunderstood,” states the letter, which does not list an author.

“Filing for bankruptcy does not mean we are going out of business,” it continues. “In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost
structure so that Red Lobster can continue as a stronger company going forward.”

Orlando-based Red Lobster files for bankruptcy but will stay open

Red Lobster is looking to restructure amid nearly $300 million in outstanding debt.

The company shuttered as many as 80 of its 650 locations last week, including at least six in Central Florida in Orlando, Altamonte Springs, Sanford and Kissimmee.

San Diego-based restaurant analyst John Gordon said the sale of its real estate by its private equity owners, which required the restaurants to pay rent, and other added debt and poor management decisions over the past decade were key contributors to the company’s financial woes.

Gordon said Monday the company had to get the word out that most of its restaurants would remain in business. “A lot of people are going to see this … and say, ‘Oh my God, Red Lobster is closed everywhere,’” he said. “And that’s not the case.”

The letter sought to address those concerns.

“For more than five decades Red Lobster has been a part of your family’s life,” it states.
“We’ve been there for your celebrations, big and small. … And Red Lobster is determined to be there for these moments for generations to come.”

It also cited other companies such as Delta Airlines and Hertz rental cars, which “used this same process to protect their futures and their customers stood with them and rooted them on. And because of that, they emerged stronger.”

“Together, we have a lot worth rooting for,” the note concludes. “We are here and ready to continue making memories with you. Join us. Dine with us. Root for us. Together, we can write a new chapter.”