Red Lobster’s Endless Shrimp Deal That Doomed Chain Was A ‘car Crash’ Waiting To Happen: Lawsuit

A caller suit claims Red Lobster’s “disastrous” endless shrimp woody was a “car crash” that near restaurants crossed nan U.S. “immobilized.”

Red Lobster’s creditors person revenge a suit successful Orange County, Florida, against Thai Union, nan seafood chain’s erstwhile mostly shareholder, and different executives. The complaint, which was first reported by Bloomberg, alleged nan Thailand-based institution worked to “squeeze retired each driblet of value” from Red Lobster done contracts that made “no economical sense” for nan chain.

“Thai Union treated nan Company arsenic small much than a distribution limb for its ain products, milking immoderate worth it could from Red Lobster, particularly arsenic nan Company became insolvent,” nan suit said.

The creditors besides deed retired astatine Thai Union complete its “Everyday $20 Ultimate Endless Shrimp” offering, which has been wide blamed for nan chain’s determination to record for Chapter 11 bankruptcy successful 2024. Red Lobster had a agelong history of moving limited-time endless shrimp promotions, but nan suit claims Thai Union’s determination to make nan woody imperishable successful 2023 was “disastrous.”

The “Everyday $20 Ultimate Endless Shrimp” offering, championed by Thai Union and interim CEO Paul Kenny, turned a “successful bequest Red Lobster Strategy” into a “car crash,” nan suit said. The creditors besides declare restaurants crossed nan U.S. were “immobilized arsenic they ran retired of shrimp and were incapable to move complete tables.”

“When it was clear that nan Everyday $20 Ultimate Endless Shrimp offering was wreaking havoc connected Red Lobster and its equilibrium sheet, Kenny doubled down. He responded by continuing nan offering—and generating tens of millions of dollars much successful overpriced shrimp orders for Thai Union—and yet near Red Lobster pinch a monolithic oversupply,” nan suit said.

The concatenation mislaid $11 cardinal successful a azygous 4th from nan deal, nan New York Post reports.

“The Everyday $20 Ultimate Endless Shrimp woody represented not a azygous irresponsible determination by Thai Union-led guidance (although it was that), but rather, nan culmination of Thai Union's efforts to steer Red Lobster to prioritize its shrimp offerings,” nan title said.

The suit calls for a assemblage proceedings to find nan magnitude of damages owed to nan creditors. Red Lobster creditors opportunity they were owed astir $295 cardinal erstwhile nan concatenation revenge for bankruptcy, according to the Post reports.

The Independent has contacted Thai Union and Red Lobster for comment.

Thai Union first bought liking successful Red Lobster successful 2016 and obtained mostly power successful 2020. The institution divested from Red Lobster successful May 2024, astir nan aforesaid clip nan concatenation began bankruptcy proceedings. The concatenation has since closed dozens of locations crossed nan U.S.

Red Lobster announced successful April that it brought backmost endless shrimp offerings astatine prime restaurants for a constricted time. The woody included a caller “Marry Me Shrimp” dish, which featured “tender shrimp successful a herb pick sauce, topped pinch a ail and herb crumble.”

“This is astir putting our guests first and bringing backmost thing they genuinely love,” Red Lobster CEO Damola Adamolekun said successful a release.