Economic Pressures Fuel Chapter 11 Bankruptcy Filings: Red Lobster, Express Retailer and Tijuana Flats Join the List

In recent months, several large companies have announced Chapter 11 bankruptcy filings, sparking a discussion among legal and business experts about the factors contributing to this trend. Red Lobster, a restaurant chain, is reportedly considering restructuring through Chapter 11 bankruptcy, adding to the list of companies facing financial challenges in the current economic climate.

Express retailer and Tijuana Flats, a Tex-Mex chain, have also made similar announcements in recent times. These bankruptcy filings highlight the economic pressures that many businesses are currently facing as a result of various factors.

Adam Marshall, an attorney with Lorium Law, pointed out that increasing interest rates have added to the financial strain on businesses. While interest rates overall remain historically low, the recent uptick has made borrowing money more expensive for many companies. This has created challenges for businesses trying to manage their debt service obligations.

Carl Gould echoed these sentiments, noting that the volatility of inflation and interest rates is likely to continue affecting businesses. As operating costs rise and borrowing money becomes more expensive, many companies are finding it difficult to stay afloat. This ripple effect of economic factors is contributing to the spike in bankruptcy filings among companies of various sizes across different industries.