Red Lobster Chain Goes Bankrupt After Unlimited Shrimp Deal (2)

Seafood restaurant chain Red Lobster filed for bankruptcy, succumbing to onerous leases, high labor costs and a disastrous unlimited shrimp promotion.

The Orlando, Florida-based company filed for Chapter 11 protection on Sunday, listing assets and liabilities of $1 billion to $10 billion each in its bankruptcy petition. The filing allows the company to keep operating while it works out a plan to repay creditors.

Red Lobster plans to hand control of the company to its lenders, led by Fortress Investment Group, who have agreed to provide $100 million in financing to support the chain through bankruptcy. The takeover ...