HARLINGEN — Attempts to salvage the iconic Luby’s restaurants founded in Texas in 1947 have apparently been abandoned, and it appears the chain will close for good unless a buyer can be found.
Financially troubled Luby’s Inc., which operates 77 of the cafeteria-style restaurants along with the Fuddruckers, Koo Koo Roo and Cheeseburger in Paradise brands, announced Tuesday its board of directors has approved and adopted a plan of liquidation and dissolution of the company.
Generally in these circumstances, all the company’s business sites permanently close and assets like buildings and real estate are sold. While a buyer still could arrive to purchase the company and keep its restaurants running, the likelihood of that occurring is low.
A press release issued by Houston-based Luby’s said it plans to convert all assets into cash to be shared by stockholders and debt-holders. The company believes it can raise between $92 million and $123 million.
“We believe that moving forward with a plan of liquidation 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,” said Christopher J. Pappas, chief executive officer and president of Luby’s. “The plan also continues to provide for the potential to place the restaurant operations with well-capitalized owners moving forward.”
Shareholders of Luby’s will have to sign off on the liquidation and dissolution plan.
Luby’s cafeteria-style restaurants in the Valley include two in Harlingen, and one each in Brownsville, McAllen, Pharr and Edinburg.