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The fishy death of Red Lobster
Red Lobster may be headed toward bankruptcy, but its business problems go far beyond all-you-can-eat shrimp.
To raise enough cash to make the deal happen, Golden Gate sold off Red Lobster's real estate to another entity — in this case, a company called American Realty Capital Properties — and then immediately leased the restaurants back. Eileen Appelbaum, a codirector of the Center for Economic and Policy Research, a progressive think tank, and a longtime private-equity critic, said in 2014 that private equity wouldn't be the solution to Red Lobster's ills. The seafood-restaurant business is a tough one in the US, and people who are hankering for lobster or fish are increasingly going to steak houses that offer those options, said Darren Tristano, the CEO and founder of Foodservice Results, a food-industry consultancy.
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