Seafood Chain In Bankruptcy, Closes 90 Stores, 2 In Illinois

It was less than a week after making the announcement that dozens of Red Lobster locations would be permanently closed that yet another announcement was released. This one had the words "Chapter 11 bankruptcy" featured prominently.

After months and months of speculation about whether or not Red Lobster would file for bankruptcy in order to save the entire chain from closing, Red Lobster confirmed things last Sunday, saying that was exactly what they're going to try to do.

This should be quite a challenge, because in their bankruptcy filings, Red Lobster said that it owes anywhere between $1 billion and $10 billion to over 100,000 creditors!

Red Lobster's Ultimate Endless Shrimp Promotion Last Year Cost Them So Much Money That They May Not Recover From It

Although it was once a "limited-time" menu offering, Red Lobster's Ultimate Endless Shrimp was turned into a permanent feature last year, and that's when the trouble really started.

For $20, you could eat as much shrimp as you wanted from two shrimp entrees, plus Red Lobster tossed in a bunch of Cheddar Bay biscuits to the deal. Even when $5 was added to the cost, the chain went through so much shrimp that they didn't make any money off the promotion at all.

All in all, Red Lobster lost nearly $20 million on shrimp, with $11 million alone in the 3rd quarter. They went on to lose over $12 million in the 4th quarter.

Even Though Things Look Pretty Bad For Red Lobster, The Chain Says They're Not Shutting Everything Down Everywhere

Here in Illinois, two Red Lobster locations were recently shuttered; one in Bloomingdale and one in Danville. That leaves Illinois with 25 operating Red Lobsters, with the majority in the Chicagoland area, one here in Rockford, and others in Springfield, Champaign and Forsyth.

Closings in our neighboring states include:

• Iowa: 2 locations, Council Bluffs and Waterloo
• Indiana: 2 locations, Indianapolis and Elkhart
• Wisconsin: 2 locations, Wawatosa and La Crosse