AUSTIN (KXAN) — After an unsuccessful search for buyers, Texas-based cafeteria chain Luby’s has announced a plan to liquidate and distribute net proceeds to stockholders, according to the company’s board of directors.
In June, the company, which began in San Antonio in 1947, announced it would seek buyers to sell operations and assets.
Luby’s plan for liquidation would include a sale of real estate and a winding down of operations.
As part of the plan, the company will convert its assets to cash and resolve outstanding obligations before distributing the assets to shareholders. Luby’s estimates its current assets would distribute about $92 to $123 million to shareholders.
CEO and President Christopher J. Pappas said in a statement:
“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.”
Before liquidation is approved, the company could still accept an offer from a buyer, should one arise.
Luby’s says it will hold a special meeting to seek approval for the plan and decide next steps.
In its Q3 fiscal statement, the company indicated profits were significantly impacted by the COVID-19 pandemic and shut down and/or limitation of service for restaurants. Back in February, Pappas called the company’s Q1 profits “not acceptable” after taking an $8.3 million-dollar net loss, according to restaurant industry magazine QSR.
As of July, the company had 43 standalone cafeteria locations, in addition to 17 Fuddruckers properties. There are currently three Luby’s restaurants in Austin, two in Dallas, 12 in Houston and nine in San Antonio.
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