The Collapse of Red Lobster: How the Endless Shrimp Deal Became the Center of a Controversial Bankruptcy Lawsuit

On paper, Red Lobster’s Everyday Endless Shrimp deal looked almost too good to be true for diners. In June 2023, the chain turned the popular limited-time promotion into a permanent menu staple, offering guests unlimited servings of shrimp for just $20. The decision left industry observers confused: how could a bargain this aggressive ever turn a profit?

As it turns out, it never did—and a new lawsuit argues this outcome was intentional all along.

The plaintiff in the case is the Red Lobster GUC Trust, a liquidation entity formed after Red Lobster filed for bankruptcy protection in 2024. The trust is suing Thai Union Group, the Thai seafood giant that served as Red Lobster’s former majority owner. The lawsuit accuses Thai Union of operating Red Lobster as nothing more than a sales channel to push its own products, squeezing every bit of possible value out of the chain even as it slid toward insolvency.

Per court filings, Thai Union’s harmful actions included restricting Red Lobster’s ability to partner with outside seafood suppliers, meddling in the chain’s executive leadership, and pushing forward with the permanent Endless Shrimp promotion that ultimately forced Red Lobster into bankruptcy.

The lawsuit traces the chain of problematic decisions back to the appointment of Paul Kenny, a Thai Union employee who also sat on the board of Red Lobster Master Holdings GP, as interim CEO. The suit claims Kenny and Thai Union pressured Red Lobster’s previous chief executive to resign, then forced the chain to purchase massive volumes of overpriced shrimp directly from Thai Union—even after it became clear Red Lobster was teetering on the edge of insolvency.

Next came the launch of the permanent $20 Ultimate Endless Shrimp deal, which the lawsuit describes as a deliberate campaign to drain every last drop of remaining value from Red Lobster ahead of its collapse. Even though internal Red Lobster leaders explicitly warned the promotion would generate crippling losses, Thai Union-backed leadership moved forward with the plan, and also banned one of Thai Union’s rival seafood suppliers from working with the chain.

The combination of overpriced ingredients from Thai Union and the promotion’s rock-bottom price point directly led to Red Lobster’s 2024 bankruptcy filing, the complaint alleges. It notes that the promotion twisted what had long been a successful, legacy strategy for Red Lobster to drive foot traffic into restaurants into a catastrophic financial crash.

Even a later price hike that raised the cost of Endless Shrimp from $20 to $25 could not reverse the damage. Red Lobster posted a record $12.5 million loss in the fourth quarter of 2023. Thai Union fully exited its stake in Red Lobster in early 2024, after reporting a $19 million loss tied to its investment in the chain across the first nine months of 2023.