Red Lobster's Ultimate Endless Shrimp promotion described as a 'car crash for the company, lawsuit says

The exterior of a Red Lobster restaurant on May 20, 2024 in Austin, Texas. Red Lobster has filed for Chapter 11 bankruptcy protection after a failed lease-back agreement and "endless shrimp" promotion backfired against company revenue. Brandon Bell | Getty Images Restaurant chain Red Lobster's "Everyday $20 Ultimate Endless Shrimp" offering was described as a "car crash" as creditors of the chain sued former controlling shareholder Thai Union. In a suit filed in Orange County, Fla., in May, the creditors said that Thai Union — a seafood producer with shares traded on Thailand's stock exchange — knew in 2023 that the chain was facing significant financial headwinds and risked insolvency. The suit, filed by a trust on behalf of the Red Lobster creditors, requests a jury trial to determine damages. Instead of considering the interests of the restaurant chain, "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." Thai Union and Red Lobster didn't immediately respond when contacted for comment by CNBC. Red Lobster filed for bankruptcy in May 2024, shuttering restaurants around the U.S. and filing for Chapter 11 protection as it faced increased competition, expensive leases, a broader pullback in consumer spending, and fallout from the shrimp promotion. …