The board of directors behind Houston-based cafeteria chain Luby's, a staple of Texas family dining for decades, announced on Wednesday it will go forward with a "plan of liquidation and dissolution," which would trigger the sale of all assets to company stockholders. CultureMap first reported the news.
Luby's announced in June that it was seeking sale of its assets, which include operating divisions of Luby's cafeteria restaurants and Fuddruckers restaurants, plus the company's contract services business.
Under this liquidation and dissolution plan, the company will next hold a meeting of stockholders to seek approval. If okayed, management will attempt to convert assets to cash and a certificate of dissolution will be filed. Luby's Inc. estimates between $92 million and $123 million in aggregate liquidating distributions to stockholders. Also at that point, the company will likely be delisted from the New York Stock Exchange.
"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," said Gerald Bodzy and Randolph Read, co-chairmen of the special committee of Luby's Inc.'s board of directors, in a statement. "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."
While a plan of liquidation and dissolution means the likelihood that Luby's restaurants will survive is low, the company's board of directors left the door open for someone to purchase those assets and keep the concept alive.
"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," said Luby's president and CEO Christopher J. Pappas in a statement. "The Plan also continues to provide for the potential to place the restaurant operations with well-capitalized owners moving forward."
It also marks another major loss for cafeteria- and buffet-style restaurants. According to Restaurant Dive, Garden Fresh filed for Chapter 7 bankruptcy in May and closed all locations, while Golden Corral re-branded without a buffet. Since the beginning of the Covid-19 pandemic, cafeteria- and buffet-style dining has been widely discouraged, and the virus and response have likely played a significant role in Luby's possible final days.
The suggestion here is to head to one of the 13 Houston Luby's locations (or one of the two in Katy, or the locations in Baytown, Conroe, Cypress, Kingwood, Pearland, Stafford, The Woodlands, or Webster) before it's too late. Soak up the nostalgia and share your memories too.