HOUSTON, TX – Luby's cafeteria chain opened its first restaurant in San Antonio in 1947, serving homestyle comfort food. The company announced in a news release on June 3 that it will immediately pursue the sale of its operating divisions and assets, including its real estate assets, and distribute the net proceeds to stockholders after payment of debt and other obligations. During the sale process, certain of the Company’s restaurants will remain open to continue serving guests.

The decision by the Company’s Board of Directors follows a comprehensive review of the Company’s operations and assets led by a Special Committee of the Board of Directors comprised of independent directors including Gerald Bodzy, Twila Day, Joe McKinney, Gasper Mir, John Morlock, and Randolph Read; Bodzy and Read co-chaired the Committee. The Special Committee, with the assistance of financial and legal advisors, reviewed a range of strategic alternatives available to the Company with the objective of maximizing stockholder value. The Special Committee recommended this course of action to the full Board of Directors which then approved the Special Committee’s recommendations.

After a careful and thorough review of the Company’s operations (including the impact of COVID-19) and the Company’s strategic options, the Board concluded a monetization process will likely unlock more value more quickly and with greater certainty for the benefit of all Luby’s stockholders than the other alternatives considered by the Special Committee. A number of stockholders have expressed their support for seeking alternatives to continuing operating the Company’s restaurants in their current form in the present environment and this monetization program will seek to accomplish that task in the most efficient manner.

Luby’s will explore a variety of potential transactions, including selling the Company’s operating divisions: Luby’s Cafeteria, Fuddruckers, and Culinary Contract Services, as well as its real estate, or selling the Company in its entirety. Net proceeds obtained from any such transactions, after satisfying the Company’s debt and other obligations, will ultimately be distributed to Luby’s stockholders. The process will be conducted in a disciplined, expeditious and cost-effective manner which seeks to maximize returns to stockholders. The Company has not established a definitive timeframe for completing this process which most likely will lead to the adoption by the Board of Directors of a formal plan of sale and proceeds distribution followed by an orderly wind down of any remaining operations. Such a plan of sale and proceeds distribution, if adopted by the Board, would require stockholder approval. There can be no assurance such a plan of sale and proceeds distribution will be adopted by the Board or approved by stockholders.

If the Company receives an offer which would result in a sale of the Company in its entirety which, in the view of the Board of Directors, will provide superior value to stockholders in comparison to the value of estimated distributions to stockholders under the contemplated sale of assets scenario, taking into account factors that could affect valuation, including timing and certainty of closing, credit market risks, proposed terms and other factors, the Company will have the ability to pursue such a transaction.

Luby’s Greek-American President and Chief Executive Officer Christopher J. Pappas said, “We believe that proceeding with this sale process followed by distributions contemplated under a proceeds distribution plan will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the Company should a compelling offer that delivers superior value be made. This path also provides for the potential to place the restaurant operations with well-capitalized owners moving forward.”

Pappas joined the Luby’s management team in 2001.