Shareholders of Luby’s Inc., parent to the cafeteria and Fuddrucker’s brands, voted overwhelmingly Tuesday to proceed with the company’s plan to liquidate its assets and eventually dissolve the company.
A special committee for Houston-based Luby’s, which operates 60 Luby’s Cafeterias and 24 Fuddruckers restaurants, last week retained investment management firm JLL “to assist it in the orderly sale of the company’s real estate holdings.” The process could take up to three years.
Luby’s said late Tuesday that, of the shares actually voted, more than 99% were in favor of board’s plan of liquidation.
Shareholders also approved authority to reduce the size of the board and a ratified the company’s existing rights agreement, often referred to as a “poison pill.”
The company intends to convert its assets into cash, satisfy or resolve its remaining liabilities and obligations and then file a certificate of dissolution and delist from the New York Stock Exchange. The assets to be sold include operating divisions Luby’s Cafeterias, Fuddruckers and the Culinary Contract Services business along with real estate.
Gerald Bodzy and Randolph Read, co-chairs of the board’s special committee looking at strategic alternatives, said in a statement: “We are pleased that the stockholders have approved the plan of liquidation and thank them for their support. The plan also continues to provide for the potential to place the restaurant operations with new owners moving forward. We can now move forward in the most efficient manner in our goal to maximize value for our stockholders.”
Institutional Shareholder Services Inc., a proxy voting advisory firm, had recommended Luby’s shareholders vote in favor of the company’s dissolution plan.
Luby’s board in September approved the plan to liquidate the company’s assets after failing to find a buyer.
The board approval came more than a year after Luby’s had sought strategic alternatives. In June, the Houston-based company indicated a sale of assets would likely be the best option for maximizing shareholder value.
Luby’s also franchises the Fuddruckers brand and operates the Luby’s Culinary Contract Services foodservice management company.
The company has been closing locations since June 2019, when it operated 131 restaurants, including 81 Luby’s cafeterias, 49 Fuddruckers and one Cheeseburger in Paradise restaurants. The company closed the final Cheeseburger in Paradise in September.
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