Red Lobster Creditors Sue Thai Union Over Endless Shrimp Bankruptcy
Creditors of Red Lobster have sued former controlling shareholder Thai Union in Orange County, Florida, alleging it pushed the chain into bankruptcy via a disastrous "Everyday $20 Ultimate Endless Shrimp" promotion. The suit claims Thai Union forced Red Lobster to buy overpriced shrimp, banned competitors, and continued the promotion despite massive losses. Red Lobster filed for Chapter 11 in May 2024 and exited in September 2024.
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Red Lobster sues former executives and Thai Union over costly Endless Shrimp promotion
Creditors of Red Lobster, the iconic seafood chain, have filed a lawsuit in Orange County, Florida, against former CEO Paul Kenny and Thai Union Group, the chain's former investor and seafood supplier. The lawsuit alleges that the defendants pushed the $20 'Ultimate Endless Shrimp' promotion despite knowing it would cause significant financial harm, while Thai Union benefited from inflated shrimp sales. The promotion, launched in 2023 to boost traffic during a consumer spending slowdown, allegedly cost the chain tens of millions of dollars due to oversupply, operational strain, and increased employee turnover. Despite internal warnings, management allegedly expanded the offer. Thai Union later exited its investment, recording a $530 million impairment charge and separately seeking $27 million from Red Lobster for overordered shrimp. The chain emerged from bankruptcy nearly two years prior, but the lawsuit seeks a jury trial to determine damages.
Yahoo FinanceRed Lobster Sues Thai Union Over Failed 2024 Shrimp Promotion
In May 2026, creditors of Red Lobster filed a lawsuit against former CEO Paul Kenny, other officers, and Thai Union Group, the chain's former owner. The lawsuit alleges that Thai Union, as controlling owner, engineered a disastrous 'Everyday $20 Ultimate Endless Shrimp' promotion in 2023 to maximize its own profits at Red Lobster's expense. The promotion required Red Lobster to buy shrimp at inflated prices from Thai Union, leading to massive losses and inability to turn over tables. This contributed to Red Lobster's financial collapse and Chapter 11 bankruptcy filing in May 2024. The plaintiffs claim breach of fiduciary duty and gross negligence. Thai Union previously dismissed similar allegations as meritless. The article also notes that such lawsuits are common in bankruptcy cases, often facilitated by directors and officers (D&O) insurance.
Yahoo FinanceRed Lobster Creditors Sue Thai Union Over 'Car Crash' Endless Shrimp Promotion
Creditors of Red Lobster have filed a lawsuit against former controlling shareholder Thai Union, alleging the seafood producer exploited the chain through a disastrous 'Everyday $20 Ultimate Endless Shrimp' promotion that led to bankruptcy. The suit, filed in Orange County, Florida, claims Thai Union pressured Red Lobster to buy increasing amounts of overpriced shrimp, banned a competitor, and ignored internal objections. As the promotion caused restaurants to run out of shrimp and lose table turnover, the company continued it, resulting in massive losses. Red Lobster filed for Chapter 11 in May 2024, closed many locations, and exited bankruptcy in September 2024 under new owner RL Holdings. Thai Union held effective control from 2020 before divesting in 2024.
US Top News and AnalysisRed Lobster's Endless Shrimp Promotion Called 'Car Crash' in Creditor Lawsuit Against Thai Union
Creditors of Red Lobster have filed a lawsuit in Orange County, Florida, accusing former controlling shareholder Thai Union of tanking the chain with the 'Everyday $20 Ultimate Endless Shrimp' promotion, described as a 'car crash' for the company. The suit alleges that Thai Union knew Red Lobster faced insolvency in 2023, yet 'doubled down on a campaign to squeeze out every drop of value' by forcing the chain to buy increasing amounts of overpriced shrimp from Thai Union and banning competitors. The promotion, implemented over employee objections, overwhelmed restaurants, causing shrimp shortages and table turnover issues. When losses mounted, Thai Union continued the promotion to generate more shrimp orders, leaving Red Lobster with massive oversupply. Red Lobster filed for Chapter 11 bankruptcy in May 2024, closed many locations, and exited bankruptcy in September 2024 under new owner RL Holdings. Thai Union divested its stake in May 2024 and did not contribute capital in the bankruptcy.
US Top News and AnalysisRed Lobster lost millions on its endless shrimp disaster. Shareholders say it was a ‘car crash’ designed to squeeze profits
Fortune reports that Red Lobster's 'endless shrimp' promotion caused significant financial losses, leading to a lawsuit. The suit accuses former controlling shareholder Thai Union of orchestrating the promotion as a deliberate ploy to boost its own seafood business at Red Lobster's expense. Shareholders describe the disaster as a 'car crash' designed to squeeze profits from the chain for the benefit of Thai Union's supply chain.
Fortune | FORTUNERed Lobster lost millions on its endless shrimp disaster. Shareholders say it was a ‘car crash’ designed to squeeze profits
A shareholder lawsuit alleges that Thai Union Group, former majority owner of Red Lobster, deliberately pushed the chain into a permanent $20 'Ultimate Endless Shrimp' promotion to benefit its own seafood sales, leading to massive losses. The promotion, previously a seasonal success, became permanent in 2023, costing Red Lobster $11 million in a single quarter and driving customers away from higher-margin items. Thai Union allegedly installed CEO Paul Kenny, who pressured the chain to buy exclusively from Thai Union. The chain filed for Chapter 11 bankruptcy in May 2024 and defaulted on a $275 million loan. Shareholders seek up to $32 million in damages and demand a jury trial.
Yahoo FinanceRed Lobster creditors sue former owner Thai Union over Endless Shrimp scheme
Creditors of Red Lobster have filed a lawsuit in Orange County, Florida, accusing former controlling stakeholder Thai Union Group of using the restaurant chain as a distribution arm to enrich itself. The lawsuit claims Thai Union steered Red Lobster to purchase overpriced shrimp, culminating in the disastrous Ultimate Endless Shrimp promotion in 2023, which cost the chain tens of millions of dollars. Thai Union executives, including CEO Thiraphong Chansiri and former Red Lobster CEO Paul Kenny, are named as defendants. The suit alleges that after acquiring a majority stake in 2020, Thai Union placed executives at Red Lobster to control purchasing, eliminate competitors, and force high-volume shrimp orders, leading to Red Lobster's bankruptcy in May 2024. The Red Lobster GUC Trust, formed in September 2024, is seeking a jury trial to determine damages.
Yahoo FinanceRed Lobster creditors sue Thai Union over 'car crash' Endless Shrimp promotion that allegedly drained value
Creditors of Red Lobster have filed a lawsuit against former controlling shareholder Thai Union, alleging the seafood giant deliberately drove the restaurant chain into financial ruin to maximize its own profits. The suit centers on the 'Everyday $20 Ultimate Endless Shrimp' promotion, which creditors describe as a 'car crash.' According to the filing, Thai Union forced Red Lobster to purchase increasing amounts of overpriced shrimp, banned competitor suppliers, and continued the promotion despite clear operational and financial damage. Thai Union's interim CEO Paul Kenny is accused of engineering the promotion over employee objections, leading to restaurants running out of shrimp and incurring massive losses. Thai Union, which bought a minority stake in 2016 and gained effective control by 2020, divested its stake in May 2024 without contributing capital during the Chapter 11 process. Red Lobster exited bankruptcy in September 2024 under new owner RL Holdings. The promotion has since returned but as a limited-time offer.
US Top News and AnalysisRed Lobster Creditors Sue Thai Union Over 'Car Crash' Endless Shrimp Promotion
Creditors of Red Lobster have filed a lawsuit against former controlling shareholder Thai Union, alleging that the seafood producer knowingly drove the chain into insolvency through a disastrous 'Everyday $20 Ultimate Endless Shrimp' promotion. The suit, filed in Orange County, Florida, claims Thai Union pressed Red Lobster to buy increasingly large amounts of overpriced shrimp at above-market prices while banning competitors. The promotion, described as a 'car crash,' immobilized restaurants as they ran out of shrimp and failed to turn over tables. Former interim CEO Paul Kenny allegedly continued the promotion despite clear financial damage, generating millions in overpriced shrimp orders for Thai Union. Thai Union, which held a majority stake from 2020, divested in May 2024 without contributing capital to bankruptcy proceedings. Red Lobster filed for Chapter 11 in May 2024 and exited in September 2024 under new owner RL Holdings.
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