Right. The holding company that bought them, sold a massive number of their primary real estate assets (they had previously owned the building and property they were housed in) to a company under the "agreement" that rent would not exceed current mortgages and/or land taxes. It was a way to generate massive capital for reinvestment.
However the buyer promptly raised rent and mortgages to the industry standard (which was way higher than most locations were paying) and that cut deeply into their profit margins.
Yeah, that never made any sense. They even have a limit as to how many plates you can get and what type of shrimps you can get unless that was more recent. You’re not going to go bankrupt with full restaurants and people buying your food because they would get other items as well. Their food just isn’t good now, it was a fancy place to go back in the 90s now it’s just frozen nasty food.
Red Lobster used to own all the property for their establishments. Private Equity company Golden Gate Capital bought red lobster and immediately sold all the land they owned to a Vanguard and Blackrock funded company. The restaurants were then forced to sign 25 year leases from the new owners which forced Red Lobster to go bankrupt and was the primary reason for their bankruptcy in 2024.
Private Equity companies are the cancer of society.
We as a society need to always remember that behind every PE company there are heartless bastards who would put us all in chains and throw us into a fire if it could enrich them. The super rich are all devils and deserve the very worst. There is no moral rich person. You can't extract wealth from people for decades on end without engaging in immoral activities.
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u/ComprehensivePut7485 9h ago
Red Lobster and its bankruptcy with endless shrimp