Red Lobster lost millions on its endless shrimp disaster. Shareholders say it was a ‘car crash’ designed to squeeze profits

Red Lobsters’ infamous $20 “Ultimate Endless Shrimp” promotion nearly sank the restaurant chain, now shareholders are alleging the promotion was a ploy by a former majority shareholder based in Thailand to squeeze as much benefit as possible from the eatery.

A May lawsuit filed in Orange County, Fla. by a trust representing shareholders alleged that Thai Union Group, one of the world’s largest seafood producers whose shares trade on the Stock Exchange of Thailand (SET), exploited its controlling stake, CNBC reported. 

“Thai Union doubled down on a campaign to squeeze out every drop of value that it could through uneconomic contracts that benefited Thai Union and made no economic sense for Red Lobster,” the lawsuit read.

In fact, the endless shrimp promotion at one point left the company $11 million in the red in a single quarter.

Red Lobster and Thai Union did not immediately respond to Fortune’s request for comment.

The shareholders claim they are owed millions after the chain filed for Chapter 11 bankruptcy in May 2024 and are also looking to dissol...