Luby’s Inc.,facing a proxy fight from an activist investor, says it is reviewing the slate of board candidates proposed by the investor.
New York City-based investment firm Bandera Partners LLC, led by Jefferson Gramm, owns an 8.9% share in the struggling restaurant company and is pushing six candidates for the board of directors, including former Sen. Phil Gramm (Jefferson Gramm’s father) and Bertucci’s Restaurants CEO Brian Wright.
“We are always open to good ideas regardless of their source and will carefully review and consider Bandera’s candidates as we would any other potential directors to assess their ability to add value to the board for the benefit of all shareholders,” Luby’s said in a statement provided to Restaurant Business.
The statement further notes that Bandera did not give the Luby’s board enough time to assess the candidates.
“As we already told Mr. Gramm in private communications, a public company board cannot possibly fulfill its fiduciary duties within that timeframe,” Luby’s said. “The board will make a formal recommendation regarding director nominees in the company’s definitive proxy statement and other materials. Luby’s shareholders are not required to take any action at this time.”
Luby’s did not provide any further details to RB regarding its decision-making timeline.
Bandera Partners, in a letter to Luby’s management filed with the Securities and Exchange Commission this week, said it intends to file a preliminary proxy statement to solicit shareholder votes for its director nominees in an effort to get the company back on track financially.
Earlier this year, Luby’s issued a “going concern warning,” expressing doubt about whether the company, which operates 84 Luby’s restaurants, 60 Fuddrucker’s units and one Cheeseburger in Paradise location, could remain solvent. It has shuttered 21 units this year and has laid off some of its corporate staff in an attempt to pay millions of dollars in outstanding debt. It reported a loss of $33.6 million in fiscal 2018 and has seen stock prices plummet in recent months.