I don't have the books of Red Lobster, but the economic rationale is that if the enterprise is continuing to persistently lose money, it is destroying capital not increasing it.
It's likely that the real estate that the Red Lobsters were built on was worth more than the entire enterprise. In such a case the implication is that the ongoing operation is negatively valued. Splitting the real estate off and valuing the restaurants at zero is a rational action -- and good for the economy.
Put a mom and pop restaurant on the spot. Or a nail salon. Or anything that can justify its costs.
There is a finite amount of capital in the world (with a little more printed each year of course). But they're not printing 20% more every year, so companies can't keep expecting to grow by 20% every year forever. It's just not possible and once a company reaches certain thresholds, we need regulations that prevent them from destroying the good parts of capitalism for simply more money than they had last year.