Iconic Luby’s liquidation yield increases for shareholders
The ongoing liquidation of the iconic Texas restaurant chain Luby’s Inc. will yield an increased payout for investors, according to a Monday filing with the Securities Exchange Commission.
The Houston company said the estimated liquidation proceeds increased by 16 cents to $3.98 a share after it began shedding assets, according to the filing. Liquidation is projected to be completed by June 30, 2022.
The value of the assets being liquidated increased by $5 million during the quarter ended March 10, stemming largely from a $4.5 million increase in the value of Luby’s real estate holdings.
The company recently sold nine Fuddruckers restaurants and converted them to franchises, it said in the filing. John Garilli, the company’s interim president and chief executive confirmed in an interview the purchases were part of a previously disclosed deal with Black Titan Holdings, a North Carolina foodservice business.
The restaurant chain struggled to keep up with changing tastes in recent years, and the pandemic further devastated its ability to in customers. Luby’s shareholders approved a liquidation plan in November.
The company recently sold two Texas properties that once held Luby’s restaurants, Garilli said, but hasn’t yet sold any operational Luby’s restaurants. He said that is still the goal.
“We’re still pursing a sale of the operating unit,” he said.
Between its Luby’s and Fuddraw druckers brands, the company was operating 81 restaurants as of March 10, down from the 118 it operated at the onset of the pandemic, it said; Fuddruckers franchisees were operating 72 locations, down from 90 before the pandemic.
Chris Pappas, former CEO of Luby’s Inc., resigned in January but remains on the board while the chain’s liquidation ramps up. In February, he acquired a company-owned Fuddruckers that occupies a property near Memorial City Mall.