Firm co-founded by Milwaukee Bucks’ billionaire co-owner wants to save Red Lobster from bankruptcy
A Wall Street investment firm co-founded by billionaire Milwaukee Bucks co-owner Wesley Edens could swoop in to save Red Lobster from bankruptcy, according to a report.
Fortress Investment Group, the $48 billion private equity firm that specializes in rehabilitating distressed businesses, is the most likely company that is expected to take charge of the struggling casual dining chain as it looks to climb out of Chapter 11, according to Bloomberg News.
Executives at Fortress, which was founded by Edens, Rob Kauffman and Randal Nardone, are poring over Red Lobster’s books in an attempt to figure out why its restaurants are failing, Bloomberg News reported.
Fortress, which already holds a large chunk of Red Lobster’s debt, is also reportedly mapping out a strategy for the restaurant chain’s comeback by identifying which regions and demographics would best support a revival of its popularity.
Edens is no longer co-chair of the company. The firm is particularly keen on shedding Red Lobster’s onerous lease agreements that have put a major dent in its bottom line, according to Bloomberg News.
The Post has sought comment from Fortress and Red Lobster.
Wesley Edens is the father of internet personality Mallory Edens, who was reportedly linked romantically with New York Jets quarterback Aaron Rodgers.
Last month, Red Lobster, which previously boasted 550 locations, filed for Chapter 11 bankruptcy protection after it shuttered 93 restaurants.
Court filings revealed that the chain is in danger of shutting down an additional 135 restaurants if the company is unable to renegotiate the terms of its leases.
The filings list 228 rejected leases that the company has flagged as money-losing propositions if they continue without adjustments, according to Restaurant Business.
Shortly after it filed for bankruptcy, The Post reported that Red Lobster was working to keep its Times Square location open.
SL Green and RXR, the landlords that own the property at 5 Times Square, are seeking to double the rental income it takes in from the restaurant from just under $1 million a year to $2.2 million annually, according to real estate brokers who spoke to The Post.
Red Lobster had offered a $20 endless shrimp dish as a limited-time promotion.
Former CEO Paul Kenny made it a permanent, year-round option in May 2023 despite “significant pushback” from other management team members, the documents said.
Some Red Lobster restaurants soon faced major shrimp shortages.
Around the same time, it eliminated two breaded shrimp suppliers, leaving Thai Union with an exclusive deal that led to higher costs, current CEO Jonathan Tibus wrote in the filing.
“Thai Union exercised an outsized influence on the company’s shrimp purchasing,” Tibus wrote. “The Debtors are currently investigating the circumstances around these decisions.”
Red Lobster, with $294 million in debt, plans to close some under performing restaurants and sell the rest to a group of its lenders including Fortress Investment Group.
Red Lobster, based in Orlando, Florida, is one of the world’s largest seafood restaurants with 54 outlets outside the United States and about 36,000 employees.
It purchases 20% of all North American lobster tails and 16% of all rock lobsters sold worldwide, the documents showed.
Red Lobster said its business has suffered from poor management decisions, high inflation, unsustainable rent costs, and increased competition.
It posted a $76 million net loss in 2023.
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