Red Lobster files for bankruptcy; restaurants in Illinois closing NBC Chicago [Video]

Red Lobster has filed for Chapter 11 bankruptcy protection days after shuttering nearly 50 restaurants across more than 20 states, including Illinois.

The seafood chain has been struggling with rising lease and labor costs in recent years and also promotions like its iconic all-you-can-eat shrimp deal that backfired.

Demand for one such recent promotion overwhelmed restaurants, reportedly contributing to millions in losses.

The seafood restaurant chain said in a court filing late Sunday that it has more than 100,000 creditors and estimated assets between $1 billion and $10 billion. The company’s estimated liabilities are between $1 billion and $10 billion.

The bankruptcy petition is signed by CEO Jonathan Tibus, a corporate restructuring specialist who took the top post at Red Lobster in March.

Restaurant liquidator TAGeX Brands announced last week that it would be auctioningoff the equipment of over 50 Red Lobster locations that were recently closed. The store closures span across more than 20 states — reducing Red Lobster’s presence in …