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They're in Chapter 11, they're not out of business yet. Why do you think that is what happened? It doesn't seem to be in line with what GGC told their LPs, so

by neom 2y ago

They're in Chapter 11, they're not out of business yet. Why do you think that is what happened? It doesn't seem to be in line with what GGC told their LPs, so I'm curious where you get your interpretation of the events from? Do you have any links or reading you could provide me with?

ImPostingOnHN 2y ago
>Why do you think that is what happened? The reason I think that is what happened is because that is what happened. Here are some links, as requested: How a bad real estate deal sunk Red Lobster [0] When a private-equity firm bought the iconic seafood chain in 2014, it sold the real estate under the restaurants for $1.5 billion. Then the restaurants struggled to pay the rents [1] It Was A Bad Real Estate Deal, Not A Bad Meal Deal That Killed Red Lobster [2] Ultimate Endless Real Estate Costs at Red Lobster [3] Golden Gate crippled Red Lobster by selling off one of its most valuable assets, the real estate it owned [4] To help fund the deal, Red Lobster spun off its real estate assets in a transaction known as a sale leaseback agreement. Red Lobster had long owned its own real estate but would now be paying rent to lease its restaurants. Sale leasebacks are very common in the restaurant industry, but the arrangement wound up hurting Red Lobster because it became stuck with leases it no longer could afford to pay. [5] But again, it wasn’t because of the shrimp. Following the sale of Red Lobster to Golden Gate, the chain’s real estate assets were also sold off, which meant that the restaurants now had to pay rent on these locations to their parent company. As such, the company was stuck in leases for underperforming restaurants that it couldn’t afford [6] 0: https://www.restaurantdive.com/news/bad-real-estate-deal-sunk-red-lobster/718267/ https://www.restaurantdive.com/news/bad-real-estate-deal-sun... 1: https://www.nbcnews.com/business/consumer/private-equity-rolled-red-lobster-rcna153397 https://www.nbcnews.com/business/consumer/private-equity-rol... 2: https://finance.yahoo.com/news/bad-real-estate-deal-not-173015627.html https://finance.yahoo.com/news/bad-real-estate-deal-not-1730... 3: https://artofprocurement.com/supply/ultimate-endless-real-estate-costs-at-red-lobster/ https://artofprocurement.com/supply/ultimate-endless-real-es... 4: https://prospect.org/economy/2024-05-22-raiding-red-lobster/ https://prospect.org/economy/2024-05-22-raiding-red-lobster/ 5: https://www.cnn.com/2024/05/03/food/red-lobster-seafood-restaurant-bankruptcy/index.html https://www.cnn.com/2024/05/03/food/red-lobster-seafood-rest... 6: https://www.eater.com/24160929/red-lobster-bankruptcy-endless-shrimp-closing-locations https://www.eater.com/24160929/red-lobster-bankruptcy-endles...
- neom 2y ago
  The vendor wouldn't have been able to afford the price of the business with the land in the deal, it would have massively complicated chapter 11 if they needed to enter it (they did), given were the company was, reducing tax burden was important (sale was done at near breakeven). Sale+Rent back is a very traditional move in clearing up a business that has very little value and is leaning heavily on a real estate portfolio (not it's core business). You can read all the court filings and disclosures over the years, it paints a different story. I understand the media told a story, but the story isn't the whole story, in fact it's just that: a story.
  - ImPostingOnHN 2y ago
    The 6 reliable sources provided, which I trust you read in the 30 minutes between their posting and your reply, speak for themselves. If you can convince all 6 reliable sources I linked, to correct their story, such that it reflects your own personal narrative of what happened, I will believe you. Alternatively, you could provide 6+ equally-reliable sources which explicitly point out that the 6 reliable sources I cited are wrong (rather than just reframing the issue, or attempting to predict what would have happened had reality been different than what it was). While I respect you as a person, and as a valuable contributor to this forum, your personal narrative simply isn't as reliable as the 6 reliable sources I provided.
    - neom 2y ago
      https://www.sec.gov/Archives/edgar/data/940944/000094094414000032/finalfinalinvestorpresentati.pdf https://www.sec.gov/Archives/edgar/data/940944/0000940944140... https://goldengatecap.com/vereit-announces-sale-of-204-million-red-lobster-pool-to-golden-gate-capital-and-enters-into-a-strategic-partnership-with-golden-gate-capital-to-sell-an-additional-400-million-of-restaurant-re/ https://goldengatecap.com/vereit-announces-sale-of-204-milli... https://fortune.com/2014/06/30/why-private-equity-investors-cant-save-red-lobster/ https://fortune.com/2014/06/30/why-private-equity-investors-... Darden had a very interesting pitch to GGC, going so far as to secure covenants from franchisees holders in advance to sale+leaseback - GGC in spite of S+LB, obligations, the in fact bought millions more in real estate to try and shore up the stability in locations. Then here, you'll see it play out: https://bankruptcy-proxy-api.dowjones.ai/cases/Florida_Middle_Bankruptcy_Court/6--24-bk-02486/Red_Lobster_Management_LLC/docs/34.pdf https://bankruptcy-proxy-api.dowjones.ai/cases/Florida_Middl... Story is considerably more complicated than PE is evil.

by neom 2y ago

ImPostingOnHN 2y ago

>Why do you think that is what happened? The reason I think that is what happened is because that is what happened. Here are some links, as requested: How a bad real estate deal sunk Red Lobster [0] When a private-equity firm bought the iconic seafood chain in 2014, it sold the real estate under the restaurants for $1.5 billion. Then the restaurants struggled to pay the rents [1] It Was A Bad Real Estate Deal, Not A Bad Meal Deal That Killed Red Lobster [2] Ultimate Endless Real Estate Costs at Red Lobster [3] Golden Gate crippled Red Lobster by selling off one of its most valuable assets, the real estate it owned [4] To help fund the deal, Red Lobster spun off its real estate assets in a transaction known as a sale leaseback agreement. Red Lobster had long owned its own real estate but would now be paying rent to lease its restaurants. Sale leasebacks are very common in the restaurant industry, but the arrangement wound up hurting Red Lobster because it became stuck with leases it no longer could afford to pay. [5] But again, it wasn’t because of the shrimp. Following the sale of Red Lobster to Golden Gate, the chain’s real estate assets were also sold off, which meant that the restaurants now had to pay rent on these locations to their parent company. As such, the company was stuck in leases for underperforming restaurants that it couldn’t afford [6] 0: https://www.restaurantdive.com/news/bad-real-estate-deal-sunk-red-lobster/718267/ https://www.restaurantdive.com/news/bad-real-estate-deal-sun... 1: https://www.nbcnews.com/business/consumer/private-equity-rolled-red-lobster-rcna153397 https://www.nbcnews.com/business/consumer/private-equity-rol... 2: https://finance.yahoo.com/news/bad-real-estate-deal-not-173015627.html https://finance.yahoo.com/news/bad-real-estate-deal-not-1730... 3: https://artofprocurement.com/supply/ultimate-endless-real-estate-costs-at-red-lobster/ https://artofprocurement.com/supply/ultimate-endless-real-es... 4: https://prospect.org/economy/2024-05-22-raiding-red-lobster/ https://prospect.org/economy/2024-05-22-raiding-red-lobster/ 5: https://www.cnn.com/2024/05/03/food/red-lobster-seafood-restaurant-bankruptcy/index.html https://www.cnn.com/2024/05/03/food/red-lobster-seafood-rest... 6: https://www.eater.com/24160929/red-lobster-bankruptcy-endless-shrimp-closing-locations https://www.eater.com/24160929/red-lobster-bankruptcy-endles...

neom 2y ago
The vendor wouldn't have been able to afford the price of the business with the land in the deal, it would have massively complicated chapter 11 if they needed to enter it (they did), given were the company was, reducing tax burden was important (sale was done at near breakeven). Sale+Rent back is a very traditional move in clearing up a business that has very little value and is leaning heavily on a real estate portfolio (not it's core business). You can read all the court filings and disclosures over the years, it paints a different story. I understand the media told a story, but the story isn't the whole story, in fact it's just that: a story.
- ImPostingOnHN 2y ago
  The 6 reliable sources provided, which I trust you read in the 30 minutes between their posting and your reply, speak for themselves. If you can convince all 6 reliable sources I linked, to correct their story, such that it reflects your own personal narrative of what happened, I will believe you. Alternatively, you could provide 6+ equally-reliable sources which explicitly point out that the 6 reliable sources I cited are wrong (rather than just reframing the issue, or attempting to predict what would have happened had reality been different than what it was). While I respect you as a person, and as a valuable contributor to this forum, your personal narrative simply isn't as reliable as the 6 reliable sources I provided.
  - neom 2y ago
    https://www.sec.gov/Archives/edgar/data/940944/000094094414000032/finalfinalinvestorpresentati.pdf https://www.sec.gov/Archives/edgar/data/940944/0000940944140... https://goldengatecap.com/vereit-announces-sale-of-204-million-red-lobster-pool-to-golden-gate-capital-and-enters-into-a-strategic-partnership-with-golden-gate-capital-to-sell-an-additional-400-million-of-restaurant-re/ https://goldengatecap.com/vereit-announces-sale-of-204-milli... https://fortune.com/2014/06/30/why-private-equity-investors-cant-save-red-lobster/ https://fortune.com/2014/06/30/why-private-equity-investors-... Darden had a very interesting pitch to GGC, going so far as to secure covenants from franchisees holders in advance to sale+leaseback - GGC in spite of S+LB, obligations, the in fact bought millions more in real estate to try and shore up the stability in locations. Then here, you'll see it play out: https://bankruptcy-proxy-api.dowjones.ai/cases/Florida_Middle_Bankruptcy_Court/6--24-bk-02486/Red_Lobster_Management_LLC/docs/34.pdf https://bankruptcy-proxy-api.dowjones.ai/cases/Florida_Middl... Story is considerably more complicated than PE is evil.