Multi-concept operator Luby’s announced Tuesday a plan to liquidate assets if a sale cannot be reached. In that event, the company would distribute the net proceeds to shareholders and dissolve.

Luby’s estimated it would generate between $92 million and $123 million (or about $3–$4 per share of common stock based on 30,752,470 shares) from doing so.

Luby’s plans to hold a special meeting of stockholders to seek approval. Assets include Luby’s Cafeterias, Fuddruckers, and the company’s culinary contract services business, as well as real estate.

The update follows Luby’s June 3 announcement that a strategic review was underway. A group of independent directors, including Gerald Bodzy, Twila Day, Joe McKinney, Gasper Mir, John Morlock, and Randolph Read, formed to review Luby’s operations and assets.

But it appears the company couldn’t find a buyer.

“This plan of liquidation is the next logical step in the company’s previously announced plan to maximize value of the company through the sale of its operations and assets,” Bodzy and Read, co-chairmen of the group, jointly said in a statement. “Our stockholders have expressed their support for seeking alternatives to continuing to operate the company’s restaurants in their current form, and we believe the plan of liquidation will allow the company to accomplish that task in the most efficient manner.”

Beginning March 17, Luby’s started closing dining rooms and furloughing employees due to COVID-19. By March 31, dining rooms were closed at all 118 company-run units and 50 Luby’s, 36 Fuddruckers, and a Cheeseburger in Paradise were temporarily shut down while 28 Luby’s and three Fuddruckers remained open for takeout, drive-thru, curbside pickup, and delivery. More than half of the corporate staff was furloughed and salaries for non-furloughed employees were cut 50 percent. Franchise owners reduced the number of operating locations from 90 pre-COVID to 37 by early April.

Later in April, the chain announced it tapped a $10 million Paycheck Protection Program loan and received a delisting warning from the New York Stock Exchange because its stock price fell below $1 per share for 30 straight days.

Dining rooms started to reopening in May. And despite sales not reaching pre-COVID levels, Luby’s said in July it achieved a profit at its open stores in the final month of the third quarter.

Luby’s ended Q3 with 108 corporate restaurants—76 Luby’s Cafeterias, 31 Fuddruckers, and a Cheeseburger in Paradise. Three Luby’s and 13 Fuddruckers had permanently closed year-to-date at that point.

Back in August 2015, however, there were 93 Luby’s, 75 Fuddrucckers, and eight Cheeseburger in Paradise locations. The company franchises about 100 Fuddruckers as well. (A look at the retraction path)

Counting only the open units in the recent period, Luby’s restaurants garnered more than 80 percent of prior-year sales levels by the end of Q3 while Fuddruckers captured more than 70 percent.

Overall, restaurant sales declined 78.9 percent in Q3. Luby’s saw a 73.6 percent plummet while Fuddruckers figures decreased 90.8 percent. The brand posted a net loss of $25 million, compared to a loss of $5.3 million in the year-ago period.

Luby’s cut G&A expenses by more than 50 percent after reviewing corporate service providers, IT needs, and personnel requirements. Additionally, Luby’s said it earned $7.2 million from selling property through Q3. It sold another $10.7 million worth of property in June and anticipated $9.2 million more by the end of Q4.

Yet the challenges stretch back much further for Luby’s. More than a year ago, the company outlined changes that included management refreshment, guest traffic goals, and a significant reduction in G&A expenses. By September, Luby’s announced the formation of a special committee and pursuit of strategic alternatives. In the months after that, the brand’s performance was labeled as “not acceptable” by CEO Chris Pappas as the company swung to a net loss of $8.3 million.

Luby’s said Tuesday it will also provide an opportunity at the upcoming special meeting for stakeholders to vote on maintaining or revoking the rights agreement, often referred to as a “poison pill.” Additionally, it will seek approval to reduce the size of its board and permit action of stockholders by written consent.

Luby’s said 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.”

If approved, the company expects to attempt to convert all of its assets into cash, satisfy or resolve its remaining liabilities and obligations, and then file a certificate of dissolution. Luby’s currently anticipates its common stock to be delisted upon filing, which is not expected to occur until the completion of the asset sales, or three years. But the delisting could take place sooner.

“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. The plan also continues to provide for the potential to place the restaurant operations with well-capitalized owners moving forward,” Pappas said in a statement.

Luby’s added that, if at any time, including after the plan is potentially approved, the company receives an offer for a corporate transaction (sale) that provides superior value, it can abandon the liquidation strategy in favor “of such an alternative transaction.”

Luby’s said aggregate payments will likely be paid in one or more distributions, if the assets are sold off as currently planned. It cannot predict the timing or number, “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-up process and the related timing to complete such transactions and overall process.”

Luby’s, founded in San Antonio in 1947 by Bob Luby, has been led by the Pappas brothers since 2001.

As of January 2019, Chris and Harris Pappas held beneficial ownership of about 34 percent of the company. They have co-founded and run more than 90 restaurants during their careers, including the Pappadeaux Seafood Kitchen, Pappasitos Cantina, and Pappas Bros. Steakhouse brands.