Red Lobster Mulls Filing for Bankruptcy to Fix Balance Sheet

Seafood restaurant chain Red Lobster is mulling a Chapter 11 bankruptcy filing as it looks to restructure its debt, according to people with knowledge of the matter.

Red Lobster has been getting advice from law firm King & Spalding, said the people, who asked not to be identified discussing a private matter. The dining chain is considering a possible Chapter 11 filing to shed some long-term contracts and renegotiate a swath of leases, the people said.

Red Lobster’s cash flows have been weighed down by onerous leases and labor costs, among other issues. Restructuring discussions are ongoing and a ...