(Bloomberg) -- The Thai seafood supplier that owns Red Lobster Management LLC disputed allegations that it forced the now-bankrupt business to take its shrimp while former management promoted an “endless” shrimp deal at its restaurants.

Thai Union Group Plc disputed the contents of a sworn statement filed in bankruptcy court from Red Lobster Chief Executive Officer Jonathan Tibus, which included allegations that the seafood supplier “exercised an outsized influence on the company’s shrimp purchasing.” 

A Red Lobster lawyer read a statement from Thai Union during the restaurant chain’s first bankruptcy court hearing in Orlando, Florida on Tuesday. Thai Union disputes all statements concerning the company and its relationship to Red Lobster, the lawyer said.

Tibus alleged the decision by former management in May 2023 to change its $20 “Ultimate Endless Shrimp” deal from a limited-time offer to a permanent deal cost the company $11 million. The deal also saddled Red Lobster “with burdensome supply obligations, particularly with its equity sponsor, Thai Union,” he said. 

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Ultimate Endless Shrimp was also heavily promoted in Red Lobster at its locations, which Tibus said was “atypical for the company” and led to major shrimp shortages at its restaurants. Some Red Lobster locations went days or sometimes weeks without certain types of shrimp, he said. 

A former Red Lobster executive also allegedly directed Thai Union to continue producing shrimp for its restaurants “that did not flow through the traditional supply process or bid cycle or adhere to the Company’s demand projections,” Tibus said. Former management also eliminated other suppliers of breaded shrimp, “leaving Thai Union with an exclusive deal that led to higher costs to Red Lobster,” he said.

Red Lobster filed Chapter 11 earlier this week and has a deal to sell the restaurant chain to lenders led by Fortress Investment Group, subject to better offers.

The case is Red Lobster Management LLC, number 24-02486, in the US Bankruptcy Court for the Middle District of Florida (Orlando).

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