Canadian court approves Red Lobster restructuring plan, company will exit bankruptcy
U.S. approval of the restructuring plan was, among other conditions, contingent on the plan's approval by the Canadian court.
A Canadian court has approved Red Lobster's reorganization plan, allowing the seafood chain to emerge from bankruptcy.
On Tuesday, Justice Peter Cavanagh of the Superior Court of Justice in Toronto issued an order recognizing and enforcing the plan, which was approved by a U.S. bankruptcy judge the previous week.
The plan ensures that all 27 Red Lobster locations in Canada will remain open, as part of approximately 544 total locations that will continue operating, down from 578 at the time of the bankruptcy filing in May.
U.S. approval of the restructuring plan was conditional upon its approval by the Canadian court.
As part of the restructuring, a lender group led by asset manager Fortress will acquire the business, a new CEO will be appointed, and more than US$60 million in new funding will be committed.
The acquisition, expected to close by the end of September, will allow the chain to continue operating as an independent company.
