Nature of Operations and Significant Accounting Policies	9 Months Ended
May 31, 2022
Accounting Policies [Abstract]
Nature of Operations and Significant Accounting Policies	Nature of Operations and Significant Accounting Policies Nature of Operations Luby's, Inc. is a Delaware corporation with headquarters in Houston, TX, (collectively, with its subsidiaries, the "Company", "we", "our", "us", or "Luby's". We operated restaurants under the brands Luby's Cafeteria, Fuddruckers and Cheeseburger in Paradise. We also had royalty arrangements with Fuddruckers franchisees. Under the Plan of Liquidation and Dissolution discussed below, we terminated our sub-license to the Cheeseburger in Paradise brand name in December 2020 and we sold the Fuddruckers brand and franchise business in on August 6, 2021. On August 26, 2021, we sold the Luby's Cafeteria brand and the operations at 35 locations for aggregate consideration of $28.4 million, which included the assumption of certain liabilities by the buyer and the issuance of promissory notes, preferred stock and common stock warrants to us. During the period beginning August 26, 2021 and ended May 31, 2022, we sold 39 real estate locations for total gross proceeds of approximately $118.7 million. A portion of the proceeds were used to fully repay our credit facility debt (See Note 10. Debt). On March 28, 2022, we sold our Culinary Contract Services business to a related party, as more fully described at Note 13. Related Parties. During the fiscal period ending May 31, 2022, we made the following liquidation distributions to the holders of our common stock: •On November 1, 2021, we paid $62.2 million, or $2.00 per share to shareholders of record as of October 25, 2021. •On March 28, 2022, we paid $15.5 million, or $0.50 per share to shareholders of record as of March 21, 2022. •On May 24, 2022, we paid $6.2 million, or $0.20 per share to shareholders of record as of May 17, 2022. Dissolution and Termination of the Company On May 31, 2022, the Company, the Trustees identified below and Delaware Trust Company (the “Resident Trustee”) entered into a Liquidating Trust Agreement (the “Liquidating Trust Agreement”) in connection with the formation of a liquidating trust, LUB Liquidating Trust (the “Trust”), for the benefit of the stockholders of the Company, to facilitate the dissolution and termination of the Company in accordance with the Plan of Liquidation and Dissolution of the Company (the "Plan of Liquidation" or the “Plan”) that was previously approved by the Company’s stockholders on November 17, 2020. The trustees of the Trust consist of the Company’s Interim President and Chief Executive Officer, John Garilli, and members of the Company’s board of directors, Gerald Bodzy and Joe C. McKinney (collectively, the “Trustees”), and the Resident Trustee. At 5:00 p.m. Eastern Daylight Time on May 31, 2022 ("the Effective Time"), the Company transferred its remaining assets (including its membership in Luby's Fuddruckers Restaurants, LLC, which has been renamed RFL, LLC) and liabilities to the Trust pursuant to the Plan of Liquidation. The last day of trading for our common stock, par value $0.32 per share, on the New York Stock Exchange was May 27, 2022. At the Effective Time of the transfer, holders of the Company's common stock automatically received one unit in the Trust ("Unit") for each share of the Company's common stock held by such holder. Units in the Trust will not be listed on the New York Stock Exchange, or any other exchange, and will generally not be transferable except by will, intestate succession or operation of law. Pursuant to the Liquidating Trust Agreement, on and after May 31, 2022, all outstanding shares of the Company are automatically deemed to be cancelled. In anticipation of the transfer, we cancelled the 500,000 shares of common stock we held as Treasury Shares. The Company has filed a Certificate of Dissolution with the Delaware Secretary of State, effective May 31, 2022. The Trust will terminate upon the earlier of three years from the date of creation or the final distribution from the Trust of all Trust assets in compliance with the Delaware General Corporation Law, unless the Trustees determine that a longer period is needed to sell real estate or collect payment in full of any installment obligations owed by a purchaser of assets of the Company or Trust assets and to make any final distribution of any such proceeds. Basis of Consolidation The accompanying consolidated financial statements include the accounts of Luby’s, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Accounting Periods Historically, the Company’s fiscal year ended on the last Wednesday in August. Accordingly, each fiscal year normally consisted of 13 four-week periods, or accounting periods, accounting for 364 days in the aggregate. However, every fifth or sixth year, there was a fiscal year that consists of 53 weeks, accounting for 371 days in the aggregate. The first fiscal quarter consisted of four four-week periods, or 16 weeks, and the remaining three quarters typically included three four-week periods, or 12 weeks, in length. The fourth fiscal quarter included 13 weeks in certain fiscal years to adjust for our standard 52 week, or 364 day, fiscal year compared to the 365 day calendar year. The Trust's fiscal year will be the twelve months beginning January 1 and ending December 31, which will be effective beginning June 1, 2022 for the year ending December 31, 2022. Prior to Adoption of the Plan of Liquidation The consolidated financial statements prior to November 19, 2020 were prepared on the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and were prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). Following the Adoption of the Plan of Liquidation As a result of the approval of the Plan by our shareholders, we determined that liquidation was imminent, as defined in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 205-30 Financial Statement Presentation, Liquidation Basis of Accounting ("ASC 205-30") and we changed our basis of accounting from the going concern basis to the liquidation basis effective November 19, 2020. Although shareholder approval of the Plan occurred on November 17, 2020, we are using the liquidation basis of accounting effective November 19, 2020 as a convenience date. Any activity between November 17, 2020 and November 19, 2020 would not be materially different under the liquidation basis of accounting. The liquidation basis of accounting differs significantly from the going concern basis, as summarized below. Under the liquidation basis of accounting, the consolidated balance sheet and consolidated statements of operations, equity and cash flows are no longer presented. The liquidation basis of accounting requires a statement of net assets in liquidation, a statement of changes in net assets in liquidation and all disclosures necessary to present relevant information about our expected resources in liquidation. The liquidation basis of accounting may only be applied prospectively from the day liquidation becomes imminent and the initial statement of changes in net assets in liquidation may present only changes in net assets that occurred during the period since that date. Under the liquidation basis of accounting, our assets are measured at their estimated net realizable value, or liquidation value, which represents the amount of their estimated cash proceeds or other consideration from liquidation, based on current contracts, estimates and other indications of sales value, and includes business unit valuations representing previously unrecognized assets that we may expect to either sell in the course of our liquidation or use in settling liabilities, such as trademarks or other intangibles. In developing these estimates, we utilized third party valuation experts, investment bankers, real estate brokers, the expertise of members of the Special Committee of our Board of Directors, and forecasts generated by our management. For estimated real estate values, we considered comparable sales transactions, our past experience selling real estate assets of the Company and, in certain instances, indicative offers, as well as capitalization rates observed for income-producing real estate. For estimated business unit valuations, we considered estimated values of the economic components of possible transactions, the value of a buyer assuming certain liabilities in a purchase transaction, and, in certain instances, indicative offers, as well as the probabilities of certain outcomes. Estimates for the liquidation value of the business units, or subset of operating restaurants, were also tested for reasonableness through a multiple of historical and projected business cash flows. All estimates by nature involve a large degree of judgement and sensitivity to the underlying assumptions. The liquidation basis of accounting requires us to accrue and present separately, without discounting, the estimated disposal and other costs, including any costs associated with the sale or settlement of our assets and liabilities and the estimated operating income or loss that we reasonably expect to incur, including providing for federal income taxes during the remaining expected duration of the liquidation period. In addition, deferred tax assets previously provided for under the going concern basis of accounting, which include net operating losses and other tax credits, may be realized partially or in full, subject to IRS limitations, to offset taxable income we expect to generate from the liquidation process. Under the liquidation basis of accounting, we recognize liabilities as they would have been recognized under the going concern basis as adjusted for the timing assumptions related to the liquidation process and they will not be reduced to expected settlement values prior to settlement. These estimates will be periodically reviewed and adjusted as appropriate. There can be no assurance that these estimated values will be realized. Such amounts should not be taken as an indication of the timing or the amount of future distributions or our actual dissolution. The valuation of our assets and liabilities, as described above, represents estimates, based on present facts and circumstances, of the net realizable value of the assets and costs associated with carrying out the Plan. The actual values and costs associated with carrying out the Plan may differ from amounts reflected in the accompanying consolidated financial statements because of the Plan's inherent uncertainty. These differences may be material. In particular, these estimates will vary with the length of time necessary to complete the Plan. Net assets in liquidation represents the estimated liquidation value to our unitholders upon liquidation. It is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to our unitholders and no assurance can be given that the distributions will equal or exceed the estimate presented in these consolidated financial statements. Subsequent Events Events subsequent to the Company’s fiscal year ended May 31, 2022 through the date of issuance of the financial statements are evaluated to determine if the nature and significance of the events warrant inclusion in the Company’s consolidated financial statements. Cash and Cash Equivalents and Restricted Cash and Cash Equivalents Cash and cash equivalents and restricted cash and cash equivalents include highly liquid investments such as money market funds that have a maturity of three months or less. Our bank account balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. Amounts in transit from credit card companies are also considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Accounts and Notes Receivable Under the liquidation basis of accounting trade, notes and other receivables are stated at the amount of their estimated cash proceeds. Operating Leases See Note 5. Leases. Income Taxes Under the going concern basis of accounting, the estimated future income tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as operating loss and tax credit carrybacks and carryforwards are recorded. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities (temporary differences) and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established against deferred tax assets when the Company determines, based on the weight of available evidence, that they are more likely to not be realized than realized. In the event the Company subsequently determines that it would be able to realize deferred income tax assets in excess of their net recorded amount, the Company would reduce the valuation allowance, which would reduce the provision for income taxes. See Note 7. Income Taxes for further discussion of the valuation allowance. We make judgments regarding the interpretation of tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions as well as by the Internal Revenue Service (“IRS”). In management’s opinion, adequate provisions for income taxes have been made for all open tax years. The potential outcomes of examinations are regularly assessed in determining the adequacy of the provision for income taxes and income tax liabilities. We believe that adequate provisions have been made for reasonably possible outcomes related to uncertain tax matters. Under the liquidation basis of accounting, an estimate of future income tax liability is prepared based on the projected sale price of assets compared to the tax basis of the assets. Additionally, the Company takes into consideration any existing net loss or capital loss carryforwards in determining the estimate for future tax liabilities. COVID-19 The COVID-19 pandemic could continue to materially impact our cash flows and value of net assets in liquidation, while we monetize our remaining assets. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates. Recent Accounting Pronouncements There are no new accounting pronouncements that are applicable or relevant to the Trust under the Liquidation Basis of Accounting.

Nature of Operations and Significant Accounting Policies

Nature of Operations

Luby's, Inc. is a Delaware corporation with headquarters in Houston, TX, (collectively, with its subsidiaries, the "Company", "we", "our", "us", or "Luby's". We operated restaurants under the brands Luby's Cafeteria, Fuddruckers and Cheeseburger in Paradise. We also had royalty arrangements with Fuddruckers franchisees. Under the Plan of Liquidation and Dissolution discussed below, we terminated our sub-license to the Cheeseburger in Paradise brand name in December 2020 and we sold the Fuddruckers brand and franchise business in on August 6, 2021.

On August 26, 2021, we sold the Luby's Cafeteria brand and the operations at 35 locations for aggregate consideration of $28.4 million, which included the assumption of certain liabilities by the buyer and the issuance of promissory notes, preferred stock and common stock warrants to us.

During the period beginning August 26, 2021 and ended May 31, 2022, we sold 39 real estate locations for total gross proceeds of approximately $118.7 million. A portion of the proceeds were used to fully repay our credit facility debt (See Note 10. Debt).

On March 28, 2022, we sold our Culinary Contract Services business to a related party, as more fully described at Note 13. Related Parties.

During the fiscal period ending May 31, 2022, we made the following liquidation distributions to the holders of our common stock:

•On November 1, 2021, we paid $62.2 million, or $2.00 per share to shareholders of record as of October 25, 2021.

•On March 28, 2022, we paid $15.5 million, or $0.50 per share to shareholders of record as of March 21, 2022.

•On May 24, 2022, we paid $6.2 million, or $0.20 per share to shareholders of record as of May 17, 2022.

Dissolution and Termination of the Company

On May 31, 2022, the Company, the Trustees identified below and Delaware Trust Company (the “Resident Trustee”) entered into a Liquidating Trust Agreement (the “Liquidating Trust Agreement”) in connection with the formation of a liquidating trust, LUB Liquidating Trust (the “Trust”), for the benefit of the stockholders of the Company, to facilitate the dissolution and termination of the Company in accordance with the Plan of Liquidation and Dissolution of the Company (the "Plan of Liquidation" or the “Plan”) that was previously approved by the Company’s stockholders on November 17, 2020. The trustees of the Trust consist of the Company’s Interim President and Chief Executive Officer, John Garilli, and members of the Company’s board of directors, Gerald Bodzy and Joe C. McKinney (collectively, the “Trustees”), and the Resident Trustee.

At 5:00 p.m. Eastern Daylight Time on May 31, 2022 ("the Effective Time"), the Company transferred its remaining assets (including its membership in Luby's Fuddruckers Restaurants, LLC, which has been renamed RFL, LLC) and liabilities to the Trust pursuant to the Plan of Liquidation. The last day of trading for our common stock, par value $0.32 per share, on the New York Stock Exchange was May 27, 2022.

At the Effective Time of the transfer, holders of the Company's common stock automatically received one unit in the Trust ("Unit") for each share of the Company's common stock held by such holder. Units in the Trust will not be listed on the New York Stock Exchange, or any other exchange, and will generally not be transferable except by will, intestate succession or operation of law. Pursuant to the Liquidating Trust Agreement, on and after May 31, 2022, all outstanding shares of the Company are automatically deemed to be cancelled. In anticipation of the transfer, we cancelled the 500,000 shares of common stock we held as Treasury Shares.

The Company has filed a Certificate of Dissolution with the Delaware Secretary of State, effective May 31, 2022.

The Trust will terminate upon the earlier of three years from the date of creation or the final distribution from the Trust of all Trust assets in compliance with the Delaware General Corporation Law, unless the Trustees determine that a longer period is needed to sell real estate or collect payment in full of any installment obligations owed by a purchaser of assets of the Company or Trust assets and to make any final distribution of any such proceeds.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Luby’s, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Historically, the Company’s fiscal year ended on the last Wednesday in August. Accordingly, each fiscal year normally consisted of 13 four-week periods, or accounting periods, accounting for 364 days in the aggregate. However, every fifth or sixth year, there was a fiscal year that consists of 53 weeks, accounting for 371 days in the aggregate. The first fiscal quarter consisted of four four-week periods, or 16 weeks, and the remaining three quarters typically included three four-week periods, or 12 weeks, in length. The fourth fiscal quarter included 13 weeks in certain fiscal years to adjust for our standard 52 week, or 364 day, fiscal year compared to the 365 day calendar year.

The Trust's fiscal year will be the twelve months beginning January 1 and ending December 31, which will be effective beginning June 1, 2022 for the year ending December 31, 2022.

Prior to Adoption of the Plan of Liquidation

The consolidated financial statements prior to November 19, 2020 were prepared on the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and were prepared in accordance with accounting principles generally accepted in the United States ("US GAAP").

Following the Adoption of the Plan of Liquidation

As a result of the approval of the Plan by our shareholders, we determined that liquidation was imminent, as defined in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 205-30 Financial Statement Presentation, Liquidation Basis of Accounting ("ASC 205-30") and we changed our basis of accounting from the going concern basis to the liquidation basis effective November 19, 2020. Although shareholder approval of the Plan occurred on November 17, 2020, we are using the liquidation basis of accounting effective November 19, 2020 as a convenience date. Any activity between November 17, 2020 and November 19, 2020 would not be materially different under the liquidation basis of accounting.

The liquidation basis of accounting differs significantly from the going concern basis, as summarized below.

Under the liquidation basis of accounting, the consolidated balance sheet and consolidated statements of operations, equity and cash flows are no longer presented.

The liquidation basis of accounting requires a statement of net assets in liquidation, a statement of changes in net assets in liquidation and all disclosures necessary to present relevant information about our expected resources in liquidation. The liquidation basis of accounting may only be applied prospectively from the day liquidation becomes imminent and the initial statement of changes in net assets in liquidation may present only changes in net assets that occurred during the period since that date.

Under the liquidation basis of accounting, our assets are measured at their estimated net realizable value, or liquidation value, which represents the amount of their estimated cash proceeds or other consideration from liquidation, based on current contracts, estimates and other indications of sales value, and includes business unit valuations representing previously unrecognized assets that we may expect to either sell in the course of our liquidation or use in settling liabilities, such as trademarks or other intangibles. In developing these estimates, we utilized third party valuation experts, investment bankers, real estate brokers, the expertise of members of the Special Committee of our Board of Directors, and forecasts generated by our management. For estimated real estate values, we considered comparable sales transactions, our past experience selling real estate assets of the Company and, in certain instances, indicative offers, as well as capitalization rates observed for income-producing real estate. For estimated business unit valuations, we considered estimated values of the economic components of possible transactions, the value of a buyer assuming certain liabilities in a purchase transaction, and, in certain instances, indicative offers, as well as the probabilities of certain outcomes. Estimates for the liquidation value of the business units, or subset of operating restaurants, were also tested for reasonableness through a multiple of historical and projected business cash flows. All estimates by nature involve a large degree of judgement and sensitivity to the underlying assumptions.

The liquidation basis of accounting requires us to accrue and present separately, without discounting, the estimated disposal and other costs, including any costs associated with the sale or settlement of our assets and liabilities and the estimated operating income or loss that we reasonably expect to incur, including providing for federal income taxes during the remaining expected duration of the liquidation period. In addition, deferred tax assets previously provided for under the going concern basis of accounting, which include net operating losses and other tax credits, may be realized partially or in full, subject to IRS limitations, to offset taxable income we expect to generate from the liquidation process.

Under the liquidation basis of accounting, we recognize liabilities as they would have been recognized under the going concern basis as adjusted for the timing assumptions related to the liquidation process and they will not be reduced to expected settlement values prior to settlement.

These estimates will be periodically reviewed and adjusted as appropriate. There can be no assurance that these estimated values will be realized. Such amounts should not be taken as an indication of the timing or the amount of future distributions or our actual dissolution.

The valuation of our assets and liabilities, as described above, represents estimates, based on present facts and circumstances, of the net realizable value of the assets and costs associated with carrying out the Plan. The actual values and costs associated with carrying out the Plan may differ from amounts reflected in the accompanying consolidated financial statements because of the Plan's inherent uncertainty. These differences may be material. In particular, these estimates will vary with the length of time necessary to complete the Plan.

Net assets in liquidation represents the estimated liquidation value to our unitholders upon liquidation. It is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to our unitholders and no assurance can be given that the distributions will equal or exceed the estimate presented in these consolidated financial statements.

Events subsequent to the Company’s fiscal year ended May 31, 2022 through the date of issuance of the financial statements are evaluated to determine if the nature and significance of the events warrant inclusion in the Company’s consolidated financial statements.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Cash and cash equivalents and restricted cash and cash equivalents include highly liquid investments such as money market funds that have a maturity of three months or less. Our bank account balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. Amounts in transit from credit card companies are also considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction.

Accounts and Notes Receivable

Under the liquidation basis of accounting trade, notes and other receivables are stated at the amount of their estimated cash proceeds.

Under the going concern basis of accounting, the estimated future income tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as operating loss and tax credit carrybacks and carryforwards are recorded. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities (temporary differences) and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established against deferred tax assets when the Company determines, based on the weight of available evidence, that they are more likely to not be realized than realized. In the event the Company subsequently determines that it would be able to realize deferred income tax assets in excess of their net recorded amount, the Company would reduce the valuation allowance, which would reduce the provision for income taxes. See Note 7. Income Taxes for further discussion of the valuation allowance.

We make judgments regarding the interpretation of tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions as well as by the Internal Revenue Service (“IRS”). In management’s opinion, adequate provisions for income taxes have been made for all open tax years. The potential outcomes of examinations are regularly assessed in determining the adequacy of the provision for income taxes and income tax liabilities. We believe that adequate provisions have been made for reasonably possible outcomes related to uncertain tax matters.

Under the liquidation basis of accounting, an estimate of future income tax liability is prepared based on the projected sale price of assets compared to the tax basis of the assets. Additionally, the Company takes into consideration any existing net loss or capital loss carryforwards in determining the estimate for future tax liabilities.

The COVID-19 pandemic could continue to materially impact our cash flows and value of net assets in liquidation, while we monetize our remaining assets.

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates.

Recent Accounting Pronouncements

There are no new accounting pronouncements that are applicable or relevant to the Trust under the Liquidation Basis of Accounting.