Red Lobsters disastrous Endless Shrimp deal was owners scheme to squeeze profits: lawsuit

The $20 “Endless Shrimp” deal that ultimately sent Red Lobster into bankruptcy wasn’t just a failed experiment – but a scheme by its owners to squeeze the company, according to a new lawsuit.Leading up to its 2024 bankruptcy filing, Thai Union – a major seafood producer and then-owner of Red Lobster – was trying to “squeeze out every drop of value” from the iconic restaurant chain, according to a suit filed last month in the Ninth Judicial Circuit Court in Florida.“Thai Union treated the Company as little more than a distribution arm for its own products, milking whatever value it could from Red Lobster, especially as the Company became insolvent,” the suit said.It was filed by a trust on behalf of Red Lobster creditors, who say they were owed about $295 million when the chain filed for bankruptcy – and are now demanding a jury trial to determine monetary damages.Red Lobster and Thai Union did not immediately respond to The Post’s requests for comment.Bloomberg earlier reported on the lawsuit.Thai Union turned Red Lobster’s all-you-can-eat deal from a limited-time offering into a permanent menu fixture, even though it “made no economic sense” – and effectively transformed “a successful legacy Red Lobster strategy” into “a car crash,” the suit said.Red Lobster lost a whopping $11 million in a single quarter from the disastrous deal.But it was an exercise in “self-dealing and exploitation,” as the boost in demand from the deal forced Red Lobster to buy up copious amounts of shrimp from Thai Union at inflated prices – even as average spend per diner declined, according to the complaint.In 2016, Thai Union – a Bangkok-based seafood giant known for brands like Chicken of the Sea and Genova – bought a minority stake in Red Lobster.Four years later, it obtained majority control of the American chain.As Red Lobster was struggling to stay afloat amid pandemic-era store closures and stiff competition, Thai Union sent several ...