HOUSTON – Luby’s, a beloved Texas-based restaurant chain for 73 years, has announced the next steps in closing after its board of directors approved and adopted a plan to liquidate and dissolve the company.
The next step in closing will be after the company’s stockholders approve the plan. The plan follows the company’s announcement on June 3, where it sought the sale of its assets, such as Luby’s Cafeterias, Fuddruckers, and the company’s Culinary Contract Services business, as well as the company’s real estate.
According to CNN Business, Luby’s restaurant sales fell 75% in the quarter ending June 3 and Fuddruckers' sales fell nearly 91% during the coronavirus pandemic.
If the plan is approved by the company’s stockholders, it will file preliminary proxy materials with the Securities and Exchange Commission. According to Luby’s, the sale of its assets will help pay its stockholders an opportunity to receive cash distributions that will maximize the value of their investments.
Although uncertain, the company estimates the sale of its assets could create distributions to stockholders of between $92 million and $123 million.
The company’s Special Committee of the Board released the following statement:
“This Plan of Liquidation is the next logical step in the Company’s previously announced plan to maximize value of the Company through the sale of its operations and assets. Our stockholders have expressed their support for seeking alternatives to continuing to operate the Company’s restaurants in their current form, and we believe the Plan of Liquidation will allow the Company to accomplish that task in the most efficient manner.”
Christopher J. Pappas, chief executive officer and president of Luby’s released the following comment:
“We believe that moving forward with a Plan of Liquidation will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the Company should a compelling offer that delivers superior value be made. The Plan also continues to provide for the potential to place the restaurant operations with well-capitalized owners moving forward.”
Luby’s operates 147 restaurants across the country, including 61 Fuddruckers and two Cheeseburger in Paradise locations.