The activist investor pushing a slate of candidates to remake the board of Luby’s Inc. was not victorious Friday in a shareholder vote at the annual meeting of the struggling restaurant company’s shareholders.
Based on a preliminary count, Luby’s shareholders elected all nine of the board members put forth by the restaurant company, according to statement.
“With this annual election now completed, our full focus returns to executing our turnaround plan for the business and ensuring that we have our right Board composition to oversee our strategy,” Luby’s CEO Christopher Pappas said in a statement. “Our goal is to create value for all shareholders, and we will be working tirelessly to achieve this by improving our operating results and helping Luby’s reach its full potential.”
For several months, New York City-based investment firm Bandera Partners LLC, which owns 9.8% of Luby’s stock, had advocated for reforms at the company and urged shareholders to approve its four candidates to the board.
“Because the company continues to generate steep operating losses while failing to meaningfully reduce overhead costs, we are convinced that immediate change is necessary to prevent further value destruction,” Bandera Partners wrote in one letter to shareholders.
Jeff Gramm, head of Bandera Partners, did not immediately respond to a request for comment from Restaurant Business on the vote.
Texas-based Luby’s, which operates 84 Luby’s restaurants, 60 Fuddrucker’s units and one Cheeseburger in Paradise location, has been struggling under heavy debt and declining revenue. Last year, company management issued a “going concern warning,” expressing doubt about whether it could remain in business. It has shuttered nearly two dozen units and has laid off some corporate staff to pay outstanding debt.