Red Lobster Canada will ask an Ontario court next week to recognize a stalking horse bid from its lenders and approve a sales process for its assets.
Court filings made on behalf of the beleaguered seafood chain’s Canadian operations say the matter will be heard by the Superior Court of Justice on June 18, as long as a U.S. court approves the sales process before then.
The filings say the steps are meant to preserve Red Lobster’s business in Canada.
The documents say the stalking horse bid will give lenders a chance to sell the company’s assets in a way that preserves and maximizes their value and helps them avoid the risk of assets being sold for a lower price.
The court documents say the bid will be “market-tested” to ensure the company nabs the highest or otherwise best offer, or combination of offers, for the Red Lobster business as a whole or its assets.
A lawyer representing Red Lobster Canada declined to comment further on the matter.
Red Lobster has 2,000 employees working at 27 locations in Canada, while the U.S. is home to 550 of the chain’s restaurants. Florida-based Red Lobster Management LLC shuttered dozens of locations in the U.S. recently and filed for Chapter 11 bankruptcy protection, which a Canadian court agreed to recognize last month.