HOUSTON, Nov. 17, 2020 /PRNewswire/ -- Luby's, Inc.
("Luby's" or the "Company") (NYSE: LUB), announced that at a
special meeting of stockholders held earlier today, stockholders
approved the Company's plan of liquidation and dissolution (the
"Plan of Liquidation" or the "Plan") that provides for the sale of
the Company's assets and distribution of the net proceeds to the
Company's stockholders, after which the Company will be dissolved.
The Company noted that of the shares actually voted, in excess of
99% voted in favor of the Plan of Liquidation.
The Company's stockholders also approved at the meeting today,
(1) authority to reduce the size of the Board of Directors, (2) to
permit action of stockholders by written consent, and (3) a
ratification of the Company's existing Rights Agreement, often
referred to as a "poison pill."
As previously disclosed, the Plan of Liquidation outlines an
orderly sale of the Company's businesses, operations, and real
estate, and an orderly wind down of any remaining operations. The
Company intends to attempt to convert all of its assets into cash,
satisfy or resolve its remaining liabilities and obligations,
including contingent liabilities and claims and costs associated
with the liquidation of the Company, and then file a certificate of
dissolution. The assets to be sold include operating divisions
Luby's Cafeterias, Fuddruckers, and the Company's Culinary Contract
Services business, as well as the Company's real estate. The
Company currently anticipates that its common stock will be
delisted from the NYSE upon the filing of the certificate of
dissolution, which is not expected to occur until the earlier of
the completion of all or substantially all of the asset sales or
three years, but the delisting of its common stock may occur sooner
in accordance with applicable rules of the NYSE.
Institutional Shareholder Services Inc. ("ISS"), a leading proxy
voting advisory firm, had previously commented in connection with
the Company's solicitation of votes to approve matters proposed at
today's special meeting of stockholders[1]: "The board appears to
have conducted a robust, multi-year process prior to making the
decision to dissolve and liquidate the company. … The board's
assertion that a dissolution is the most viable alternative seems
reasonable." ISS also stated that "the market appears to have
reacted positively to the proposed plan of dissolution."
Gerald Bodzy and Randolph Read, Co-Chairman of the Special
Committee of independent directors of the Board that has been asked
by the Board to develop strategic alternatives for the Company,
jointly commented, "We are pleased that the stockholders have
approved the Plan of Liquidation and thank them for their support.
The Plan also continues to provide for the potential to place
the restaurant operations with new owners moving forward. We can
now move forward in the most efficient manner in our goal to
maximize value for our stockholders."
If at any time, including now that the Plan has been approved by
stockholders, the Company receives an offer for a corporate
transaction that, in the view of the Board of Directors, will
provide superior value to its stockholders in comparison to the
value of the estimated distributions under the Plan, taking into
account factors that could affect valuation, including timing and
certainty of closing, credit market risks, proposed terms and other
factors, the Plan could be abandoned in favor of such alternative
transaction.
The Company cannot predict with any precision the timing or
amount of any distributions to stockholders, as uncertainties exist
as to the value it may receive upon the sale of assets pursuant to
its monetization strategy, the net value of any remaining assets
after such sales are completed, the ultimate amount of expenses
associated with implementing its monetization strategy,
liabilities, operating costs and amounts to be set aside for
claims, obligations and provisions during the liquidation and
winding-down process and the related timing to complete such
transactions and overall process.
About Luby's
Luby's, Inc. (NYSE: LUB) operates two core restaurant brands:
Luby's Cafeterias and Fuddruckers. Luby's is also the franchisor
for the Fuddruckers restaurant brand. In addition, through its
Luby's Culinary Contract Services business segment, Luby's provides
food service management to sites consisting of healthcare,
corporate dining locations, sports stadiums, and sales through
retail grocery stores.
Forward Looking Statements
This press release contains statements that are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements
contained in this press release, other than statements of
historical fact, are "forward-looking statements" for purposes of
these provisions, including the statements regarding sales of
assets, effects of the Plan, expected proceeds from the sale of
assets, and expected proceeds to be distributed to stockholders or
the timing thereof.
Luby's cautions readers that various factors could cause its
actual financial and operational results to differ materially from
those indicated by forward-looking statements made from
time-to-time in news releases, reports, proxy statements,
registration statements, and other written communications, as well
as oral statements made from time to time by representatives of
Luby's. The following factors, as well as any other cautionary
language included in this press release, provide examples of risks,
uncertainties and events that may cause Luby's actual results to
differ materially from the expectations Luby's describes in such
forward-looking statements: general business and economic
conditions; the effects of the COVID-19 pandemic; the impact of
competition; our operating initiatives; fluctuations in the costs
of commodities, including beef, poultry, seafood, dairy, cheese and
produce; increases in utility costs, including the costs of natural
gas and other energy supplies; changes in the availability and cost
of labor; the seasonality of Luby's business; changes in
governmental regulations, including changes in minimum wages; the
effects of inflation; the availability of credit; unfavorable
publicity relating to operations, including publicity concerning
food quality, illness or other health concerns or labor relations;
the continued service of key management personnel; and other risks
and uncertainties disclosed in Luby's annual reports on Form 10-K
and quarterly reports on Form 10-Q. Further information regarding
the risks, uncertainties and other factors relating the Plan, the
expected net proceeds from the sale of assets, and expected
proceeds to be distributed to stockholders, are discussed under the
section "Risk Factors" in the definitive proxy statement that has
been filed with the SEC in connection with the Plan.
For additional information contact:
Dennard Lascar Investor
Relations
Rick Black / Ken Dennard
LUB@dennardlascar.com
[1] Permission to quote ISS was neither sought nor
obtained.
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SOURCE Luby's, Inc.