Red Lobster to exit Chapter 11 bankruptcy after approval of sale to new owner

There may be smooth sailing ahead for Red Lobster after the popular seafood restaurant chain received court approval for its Chapter 11 plan to sell the company to a new firm.

Red Lobster Management LLC announced in a press release Thursday that the restaurant chain will be acquired by RL Investor Holdings LLC -- an entity "created by funds managed by affiliates of Fortress Investment Group LLC" with co-investors TCW Private Credit and Blue Torch Capital -- and will operate as an independent company.

"The acquisition is anticipated to close before the end of September," the company stated.

According to documents obtained by ABC News, Red Lobster's voluntary Chapter 11 plan, which was filed on May 19, 2024, in the U.S. Bankruptcy Court in the Middle District of Florida, was approved Sept. 5 by Judge Grace Robson.

Once the acquisition closes, the approved restructuring plan will include a new leadership change, with former P.F. Chang's CEO Damola Adamolekun stepping in to lead Red Lobster and current Red Lobster CEO Jonathan Tibus stepping down to leave the company, according to the press release.

"This is a great day for Red Lobster," Adamolekun said in a statement. "With our new backers, we have a comprehensive and long-term investment plan -- including a commitment of more than $60 million in new funding -- that will help to reinvigorate the iconic brand while keeping the best of its history."

Adamolekun thanked the current CEO for his stewardship leading the restaurant through its Chapter 11 restructuring plan.

Tibus added in the statement that Red Lobster will emerge "stronger financially and operationally" with "new backers who are resolutely focused on investment and growth."

Earlier this year, Red Lobster closed at least 99 restaurants, however it still operates 544 locations across 44 states and in four Canadian Provinces.