Red Lobster shareholders have sued Thai Union Group, alleging the company exploited its controlling stake to force the chain into a permanent "Ultimate Endless Shrimp" promotion at $20 per order that cost Red Lobster $11 million（約18億円） in a single quarter. The lawsuit claims Thai Union, which was also Red Lobster's exclusive shrimp supplier, engineered the unsustainable promotion to extract maximum profit, contributing to the restaurant chain's bankruptcy filing in May 2024.
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Shareholders sued Thai Union Group, Red Lobster's former majority shareholder, alleging it pushed the chain to make its $20 "Ultimate Endless Shrimp" promotion permanent in 2023 to boost shrimp sales from Thai Union—its exclusive supplier. The promotion left Red Lobster $11 million（約18億円） in the red in a single quarter and contributed to the chain filing for Chapter 11 bankruptcy in May 2024.
Why it matters
The lawsuit claims Thai Union engineered the promotion to "squeeze out every drop of value" through what the suit calls "uneconomic contracts." Restaurants ran out of shrimp, customers shifted away from higher-margin menu items, and the chain defaulted on a $275 million（約440億円） term loan in September 2023. Red Lobster emerged from bankruptcy in September 2024 after closing about 130 locations and cutting 10% of corporate staff.
What to watch
Shareholders are seeking to dissolve some $32 million（約51億円） in transactions they allege Thai Union pressured Red Lobster to enter into in 2023, and are demanding a jury trial to determine damages. Red Lobster brought the promotion back in April 2024 as a limited-time offer under new CEO Damola Adamolekun, who had said endless shrimp would never return.
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