Red Lobster exiting bankruptcy as Canadian court approves restructuring plan

A Canadian court has cleared the reorganization plan of Red Lobster that will see the seafood chain exit bankruptcy.

Justice Peter Cavanagh of the Superior Court of Justice in Toronto on Tuesday granted an order that recognizes and gives force to the plan approved by a U.S. bankruptcy judge last week.

The plan is expected to allow all 27 restaurant locations in Canada to remain open as part of the roughly 544 total locations that will stay in operation, which is down from 578 as of May’s bankruptcy filing.

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U.S. approval of the restructuring plan was, among other conditions, contingent on the plan’s approval by the Canadian court.

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The restructuring will see a lender group led by asset manager Fortress acquire the business, a new CEO being installed and a commitment of more than US$60 million in new funding.

Under terms of the acquisition, which is expected to close by the end of September, the chain will continue to operate as an independent company.

— with files from AP