CEO steps down at Luby’s as liquidation continues
Christopher Pappas resigned from Luby’s top post as the company moved forward with its liquidation, according to a Monday filing with the Securities Exchange Commission. The filing also outlined a dismal earnings report.
Pappas, whose resignation was effective Jan. 27, will remain on Luby’s board, according to the filing. The company did not respond to a request for comment about the resignation.
The restaurant chain struggled to keep up with changing tastes in recent years, and the pandemic further devastated its ability to draw in customers. Luby’s shareholders approved a liquidation plan in November.
The company estimates shareholders will receive $3.82 per share in liquidated disbursements, Luby’s said in its Monday
filing, which also reports a $3 million loss (10 cents a share) in the 12-week period ended Nov. 18.
More than a dozen former Luby’s and Fuddruckers properties can be found in online for-sale listings. The company plans to cease all its restaurant operations by the August end of its fiscal year, according to the filing.
On Friday, the company also learned the Small Business Administration is conducting an audit of Luby’s $10 million Payroll Protection Program loan.
"This review may result in a determination that we were ineligible for the loan or are ineligible to receive the loan forgiveness amount that we have claimed,” Luby’s said in its filing, “or may delay our receipt of loan forgiveness, if any.”
The SBA declined to comment on specific borrowers, but said it was reviewing all loans of more than $2 million.
The company said in the filing that as of Dec. 16 it was “in full compliance” with applicable regulations. Luby’s received the loan in April and applied for full forgiveness in November.
Following Pappas’ resignation, the company appointed John Garilli, of Winthrop Capital Advisors, as interim president and chief executive officer. Luby’s agreed to pay a onetime fee of $50,000 and a monthly fee of $20,000 for as long as he serves the company in the role.