When Luby's announced a plan of "liquidation and dissolution," the cafeteria chain's long-term prospects for survival seemed pretty dim, but a faint flicker of hope remains.
In a document filed with the Securities and Exchange Commission (reported first by the Houston Chronicle), the company revealed it has entered into a confidential agreement with Luby's CEO Chris Pappas that could lead to his acquiring the company.
The document explicitly states that Pappas has been granted access to financial information only for the purpose of potentially making an offer for some portion of the company's assets. Pappas has not made an offer, and, even when he does, the company is not obligated to accept it.
Still, Pappas is one of the company's major shareholders, holding 18.43 percent of the company's shares. His brother, Harris Pappas, owns an additional 17.86 percent of the company's shares, per the filing. 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. At the time, Chris Pappas said the plan provided for the possibility that "well-capitalized owners" could maintain the restaurant's operations. As the co-owner of one of Houston's most successful restaurant groups, he would certainly qualify.
Whatever the future holds, 80 Luby's and Fuddruckers locations remain open. 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.