Red Lobster is reportedly considering filing for bankruptcy to relieve financial pressures that have weighed on the company.

According to a report by Bloomberg citing people familiar with the discussions, Red Lobster is weighing a Chapter 11 bankruptcy filing to renegotiate burdensome leases and address other long-term contracts as well as rising labor costs.

The outlet reported that the seafood restaurant chain is being advised by law firm King & Spalding on the subject, and that while discussions about restructuring are ongoing and that no final decisions have been made about a bankruptcy filing.

By filing for Chapter 11 bankruptcy, the company could continue to operate while it works with creditors and investors to put in place a debt reduction plan that would allow it to head into the future on a better financial footing.

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Red Lobster did not immediately respond to a request for comment.

The seafood chain has had a variety of owners and major investors since it was founded in 1968 by Bill Darden and Charley Woodsby. 

General Mills acquired the company in 1970 and helped it rapidly expand throughout the U.S. and Canada, before spinning it off into an independent publicly traded company called Darden Restaurants over two decades later.

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Darden Restaurants sold Red Lobster to Golden Gate Capital in 2014. Thai Union, which previously had a one-fourth stake in the company, bought out Golden Gate's stake in the company in 2021.

Earlier this year, Thai Union announced it was planning to exit its investment in Red Lobster and take a write off after announcing in a regulatory filing that the restaurant chain's "ongoing financial requirements no longer align with Thai Union's capital allocation priorities."

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Red Lobster brought in Jonathan Tibus as its new CEO last month. Tibus is considered an expert in developing and implementing restructuring plans at underperforming restaurants, retail and hospitality companies and has led numerous restructuring efforts.