Red Lobster files for bankruptcy, says it has $1 billion in debt

Red Lobster, the largest seafood restaurant chain in the world, has filed for bankruptcy, the company announced on Monday.

"The Company intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern," read the announcement, "As part of these filings, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders."

The company has more than $1 billion in debt and under $30 million in cash, according to the bankruptcy filing.

Red Lobster already started closing restaurants prior to declaring bankruptcy and it appears that more closures will occur following the filing.

The company previous blamed its financial woes on its decision to make endless shrimp a permanent item on the menu.

The company currently operates 578 restaurants, according to its bankruptcy filing.