The management of casual restaurant chain Luby’s Inc. chalked up a big win on Friday – and so did some Texas lawyers.
The Houston-based company beat New York activist investor Bandera Partners in a proxy fight, with its shareholders voting in all nine of its nominees to its board of directors, according to a preliminary vote count at its annual meeting on Friday.
Sidley Austin counseled the company on the fight, including Houston partner George Vlahakos and associates Leonard Wood, John Stribling, Leslie Slaughter, Riley Fedechko and Tanner Groce.
Vlahakos – who joined Sidley in 2017 from Andrews Kurth – led the team with Kai Haakon Liekefett, chair of firm’s shareholder activism practice in New York who previously practiced at Vinson & Elkins in Houston. New York associate Chris Porcelli also was part of the group.
Luby’s general counsel is Peter Tropoli, who returned to the position in October after relinquishing his role as chief operating officer to Todd Coutee.
Luby’s stock jumped by 6.6 percent on news of the vote to $1.93 per share.
Bandera – which owns about 10 percent of Luby’s shares – was going after four seats on the company’s board, which it criticized for not being more accountable, letting the stock price slide and paying its management too much.
Last week Luby’s proposed to have two independent members with restaurant and turnaround experience replace existing directors and elect a new chair this year.
Bandera is headed by Jeff Gramm, the son of former U.S. senator Phil Gramm, and has held stock in Luby’s for more than 10 years.
The firm was proposing that both Gramms should be on the board, which proxy advisers Institutional Shareholder Services and Egan-Jones supported. Its other two nominees were Stacy Hock, chairwoman of Texans for Education Opportunity, and Savneet Singh, managing partner of New York-based Tera Holdings.
Luby’s independent nominees included Gerald Bodzy, president and owner of Showcase Custom Vinyl Windows and Doors in Houston; Judith Craven, president of physician consulting firm JAE & Associates; Twila Day, chief information officer of chemical maker Huntsman Corp. in the Woodlands; Jill Griffin, principal of the Griffin Group in Austin; Frank Markantonis, general counsel at Pappas Restaurants Inc.; and Joe McKinney, vice chairman of San Antonio-based Broadway National Bank.
Nominees from management and past-management included Gasper Mir III, Luby’s independent chairman who is stepping down this year; Christopher J. Pappas, who is CEO; and Harris J. Pappas, the company’s former COO.
“Our goal as a company and a board is to be responsive to shareholder feedback and continue these dialogues, particularly as we conduct the previously announced search to add two new independent directors to the board,” Mir said in a statement. “We will welcome the input and views of Bandera Partners during our board refreshment process and will be seeking to engage further with them in the near-term.”
Christopher Pappas said with the election over, the company’s focus returns to executing its turnaround plan for the business and ensuring that it has the right board composition to oversee its strategy. “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,” he said.
Luby’s operates 140 restaurants nationally: 82 Luby’s Cafeterias, 57 Fuddruckers and one Cheeseburger in Paradise. It also is the franchisor for 104 Fuddruckers franchise locations in the U.S., Canada, Mexico, Panama and Colombia and provides food service management to 30 sites, including healthcare, higher education, sport stadiums and corporate dining locations.