Red Lobster bankruptcy: Restaurant moves closer to sale to lenders [Video]

NEW YORK –

Red Lobster is moving closer to a bankruptcy sale that would put lenders, including Fortress Investment Group, in charge of the company after no other bidders stepped up with an offer to repay the struggling U.S. restaurant chain’s debt, according to court documents.

Red Lobster filed for bankruptcy in Florida in May with about US$300 million in debt and a plan to close some restaurants and sell itself to its lenders or a higher bidder.

The company, which took an additional US$100 million loan to fund its restructuring, had planned to conduct an auction on Tuesday, but it said in a Monday court filing that it had received no qualified bids.

Red Lobster was willing to consider bids for the entire company if a buyer could pay at least US$2.5 million more than the company’s debt, according to the court documents.

Without a better offer, Red Lobster will hand over …