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Red Lobster is considering filing for bankruptcy – Metro Puerto Rico

Red Lobster is considering filing for bankruptcy – Metro Puerto Rico

Red Lobster seafood restaurant chain The company is considering filing for Chapter 11 bankruptcy as it seeks to restructure its debts, several international media outlets reported.

The management of the aforementioned chain received advice on the above-mentioned issue from the law firm King & Spalding.

Considerations include: disposing of some long-term contracts and renegotiating a number of leases.

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Leases and burdensome labor costs took a toll on Red Lobster's cash flows. Discussions regarding the restructuring are still ongoing and a final decision has not yet been taken.

If the chain declares bankruptcy, it would allow the company to continue operations while developing a debt reduction plan.

The last Reb Lobster restaurant in Puerto Rico closed its doors in May 2023.

They take thousands of dollars' worth of food from Red Lobster in Bayamon

What is the meaning of the different numbers for the chapters of the bankruptcy system?

information: https://www.cacb.uscourts.gov/

Chapter 7 – Chapter 7 refers to bankruptcy that involves the liquidation of property and can be used on an individual basis to obtain the discharge of certain debts without having to make future payments. It may also be used by some companies that wish to liquidate their business assets under the protection of a bankruptcy court.

A trustee is appointed to seize the debtor's assets and sell or distribute them for the benefit of creditors. The trustee may also recover some of the assets that have already been distributed and return those assets to the bankruptcy estate.

Creditors generally have the right to file “claims” specifying the amount of money owed and the documents supporting the claim. In some cases, you are allowed to file a written request (petition) with the court for an order allowing the creditor to repossess a residence, car, or other property.

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Chapter 11 – Chapter 11 is commonly known as a “reorganization chapter” and allows a company, partnership, or individual to properly reorganize its assets and debts without having to liquidate all of its assets. The primary goal is for the debtor to retain control of the property and file a “reorganization plan” to pay creditors. If the reorganization plan is accepted by the creditors and approved by the court, the debtor will be able to reorganize his or her personal, financial, or business affairs.

A guardian may be appointed if a petition is filed with the court and it is agreed that a guardian is necessary to manage the debtor's affairs.

Creditors have the right to file “claims” specifying the amount of money owed and the documents supporting the claim. They may also oppose the debtor's proposed plan, and in some cases file a written request (petition) for an order allowing the creditor to repossess a residence, car, or other property.

Chapter 13 Chapter 13 refers to the reorganization of the debts of an individual who has a regular income and has debts less than the limits set by law. The debtor proposes a “Chapter 13 Plan,” which proposes a repayment plan. The plan outlines details that allow the debtor to maintain control of the property, stay current on existing debts, and pay at least some of the outstanding debts. A guardian is appointed to monitor activity related to the case and submit a report to the court whether the debtor is fulfilling his obligations or not. If the debtor does not comply with his obligations, the trustee or creditor can ask the court to dismiss the lawsuit. If the debtor's income increases, the trustee or creditor can ask the court to increase the amount to be paid to creditors.

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Creditors have the right to file “claims” specifying the amount of money owed and the documents supporting the claim. They may also oppose the debtor's proposed plan and in some cases file an application (petition) with the court for an order allowing the creditor to regain possession of a residence, car, or other property.