Red Lobster’s bankruptcy fallout is heading back to court, with the seafood chain’s creditors suing former CEO Paul Kenny, former executives, and former majority owner Thai Union Group over decisions they claim helped drive the iconic brand into Chapter 11.
According to industry publication Restaurant Dive, the lawsuit, filed in May by Red Lobster's creditors' trust, alleges Thai Union prioritized its own financial interests while the restaurant chain was teetering on the brink of insolvency in 2023. According to the complaint, company leadership pushed ahead with the now-infamous Everyday $20 Ultimate Endless Shrimp promotion despite objections from Red Lobster employees, resulting in massive financial losses while benefiting Thai Union, Red Lobster's exclusive shrimp supplier.
The filing alleges Thai Union "doubled down on a campaign to squeeze out every drop of value that it could through uneconomic contracts that benefited Thai Union and made no economic sense for Red Lobster."
It also describes the promotion as a "car crash," claiming restaurants became "immobilized as they ran out of shrimp and were unable to turn over tables" after demand far exceeded expectations.
Those allegations build on a controversy that has followed Red Lobster for years. The Endless Shrimp promotion had long been a successful seasonal event before it was made permanent on the menu in 2023. Internal management reportedly opposed the move, but the promotion went forward anyway, ultimately costing the company more than $11 million in a single quarter.
The chain later alleged in bankruptcy proceedings that it was purchasing shrimp from Thai Union at inflated prices and lacked an alternative supplier. Thai Union denied similar allegations during the bankruptcy process, calling them "meritless allegations."
Since taking over, Adamolekun has streamlined the menu, restored fan favorites like hush puppies and popcorn shrimp, rolled out seafood boils and value promotions, and repeatedly emphasized that the chain would avoid repeating past mistakes.
When discussing the original Endless Shrimp debacle in 2024, he famously remarked, "I know how to do math."
