HOUSTON, TX – Hope still lingers for Luby’s cafeteria chain after the company announced “a plan of liquidation and dissolution,” Culture Map Houston (CMH) reported on September 21.
According to a document filed with the Securities and Exchange Commission (SEC), “the company revealed it has entered into a confidential agreement with Luby's CEO Chris Pappas that could lead to his acquiring the company,” CMH reported, adding that “the document explicitly states that Pappas has only been granted access to financial information for the purpose of potentially making an offer for some portion of the company's assets.”
Greek-American Pappas “has not made an offer, and, even when he does, the company is not obligated to accept it,” CMH reported, noting that The Houston Chronicle first reported on the details of the SEC filing.
“Pappas is one of the company's major shareholders, holding 18.43 percent of the company's shares,” CMH reported, adding that “his brother, Harris Pappas, owns an additional 17.86 percent of the company's shares, per the filing” and “their holdings include approximately 1 million shares owned by Pappas Restaurants, the Houston-based restaurant juggernaut they own together.”
“When Luby's announced the liquidation plan earlier this month, the company said it expected to realize between $92 and $123 million for its holdings, which also include the Fuddruckers chain and the real estate many of its restaurants occupy,” CMH reported, noting that “at the time, Chris Pappas said the plan provided for the possibility that ‘well-capitalized owners’ could maintain the restaurant's operations,” and “as the co-owner of one of the city's most successful restaurant groups, he would certainly qualify.”
For now, “80 Luby's and Fuddruckers locations remain open,” CMH reported, adding that “diners who want these establishments to remain in business might want to consider patronizing them to demonstrate to Pappas and his brother than they're worth acquiring.”