Luby's, Inc. Stockholders Approve Plan Of Liquidation And Dissolution

Stockholders Also Approve Charter Amendments to Allow Stockholder Written Consents and to Reduce Minimum and Maximum Number of Directors, and Ratify Existing "Poison Pill" Rights Plan

Plan of Liquidation and Dissolution Will Be Implemented by the Board Through the Orderly Sale of the Company's Assets Followed by Distribution of Net Proceeds to Stockholders

News provided by

Luby's, Inc.

Nov 17, 2020, 17:19 ET

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
[email protected]

[1] Permission to quote ISS was neither sought nor obtained.

SOURCE Luby's, Inc.