The sale of Schlotzsky's assets, approved the day before Thanksgiving by Judge Leif M. Clark with the United States Bankruptcy Court for the Western District of Texas, San Antonio Division, will be held on Dec. 7 at the Dallas offices of the company's law firm, Haynes and Boone, with bids accepted the day before. "There are a number of leading contenders to buy the company, both strategic and financial," Sam Coats, interim president and CEO of the sandwich maker, tells GSR. "People with financial wherewithal have partnered with restaurant operating backgrounds. This is very encouraging.

"At one time, this company had a market cap of more than $170 million, but when I started on June 17, market cap had dwindled to less than $11 million," he continues. "We had too many stores that were negative cash-flowing, typically stores that corporate had taken back, which were then closed. Technically, the company was insolvent when I walked in the door," says Coats, a former airline executive who was involved in the restructuring of Continental.

At its peak about five years ago, there were about 750 Schlotzsky's. Now there are 511 restaurants in 36 states, the District of Columbia and six foreign countries. "It has the ability to grow again, and most of the suitors we've done due diligence with agree that the company needs to simplify things," says Coats. "For example, I think you're see more kiosk and in-line operations going forward."