The sit-down seafood chain Red Lobster announced a voluntary Chapter 11 bankruptcy filing in Florida on Sunday, marking a turning point for the 56-year-old company.

Court documents show the Orlando-based company has more than 100,000 creditors with liabilities totaling over $1 billion. Red Lobster said it has what’s called a stalking horse purchase agreement to sell its business to the company’s existing term lenders.

The filing comes months after the seafood giant Thai Union announced its intention to drop its investment in Red Lobster. The chain has been impacted by a combination of factors including the COVID-19 pandemic, higher interest rates, and rising costs of material and labor, the union said.

What’s next? Restaurants will remain open throughout the proceedings with fewer locations, according to a company statement.

What began as a single family restaurant in Lakeland once had more than 700 locations worldwide, according to the company website. Leaders aim to use the proceedings to improve operations while selling most of the company’s assets. The restructuring will allow the company to deal with its challenges and become stronger, Red Lobster Chief Executive Jonathan Tibus said in the statement.

Gainesville has one Red Lobster restaurant located at 6910 W. Newberry Rd. that is currently listed as “temporarily closed.”

This story originally appeared in WORLD. © 2024, reprinted with permission. All rights reserved.