Pappas brothers weighing Luby’s buy

Houston restaurateurs Christopher and Harris Pappas have filed paperwork in what could evolve into a bid to buy Luby’s assets from the floundering company.

Following the board’s vote to dissolve the iconic restaurant chain earlier this month, the brothers and Luby’s executed a confidentiality agreement on Sept. 11 that allows the pair access to confidential Luby’s information while they evaluate whether or not to make an offer, according to a filing with the Securities and Exchange Commission.

Christopher Pappas has served as the president and chief executive officer since March 2001. He controls 18.4 percent of the company’s outstanding shares. Harris Pappas served as chief operating officer of Luby’s until his retirement in 2011 and as a member of its board until his resignation on Jan. 31, 2019. He controls 17.9 percent of outstanding shares.

Following years of struggle for the cafeteria brand, Luby’s board voted unanimously on Sept. 4 to liquidate and dissolve the company. Dissolution plans require approval from shareholders during a special meeting yet to be scheduled.

The company also said in an SEC filing Monday that it had approved a raise for Chief Operating Officer Benjamin Coutee, whose base salary will increase to $300,000 from $283,000.

Luby’s board has formed a special committee to examine “a range of strategic alternatives available to the Company with the objective of maximizing stockholder value.”

The filings include a standstill provision, a formality that safeguards the company from a hostile takeover by the Pappases.

Still, said Anne Anderson, a finance professor at Jones College of Business at Middle Tennessee State University, the Pappas brothers own the largest stake in the business and their voices carry weight.

“More likely than not,” she said, “what the Pappases want is what’s going to happen.”

Company officials declined to comment on the developments.