(NewsNation) — Seafood restaurant chain Red Lobster is considering filing for Chapter 11 bankruptcy, according to a report from Bloomberg.

People with knowledge of the matter told the publication that law firm King & Spalding had been advising Red Lobster. The Chapter 11 filing is being considered to shed “some long-term contracts and renegotiate a swath of leases,” sources said. Discussions on restructuring are ongoing.

Bloomberg writes that Red Lobster’s cash flows have been affected by “onerous leases and labor costs,” among other issues.

The company has not made a final decision on whether to file for bankruptcy. Red Lobster’s press office did not immediately respond to a request for comment Wednesday.

Cases filed under Chapter 11 of the bankruptcy code are also referred to as a “reorganization” by the Internal Revenue Service. This chapter is mainly used by incorporated businesses.

Under Chapter 11, Red Lobster would be able to use the time from its bankruptcy filing up until the confirmation of its debt repayment plan to figure out its finances. If it cannot successfully reorganize and get an approved debt repayment plan, the Chapter 11 bankruptcy case could be converted to a “liquidating” Chapter 7.

“To take full advantage of the bankruptcy laws and get a fresh start, it is important that you do not continue to incur additional debt,” the IRS warned on its website.

Red Lobster has had multiple owners and management changes since it first opened in Lakeland, Florida, in 1968. Thai Union Group Plc took control of it in 2020. However, Bloomberg reported that Thai Union Group wrote down its stake in Red Lobster this year and said the company’s “ongoing financial requirements no longer align with Thai Union’s capital allocation priorities.”