Prior to the Chapter 11 filing, Cosi entered into a non-binding term sheet with its lenders, AB Opportunity Fund LLC, AB Value Partners, L.P., and Milfam II L.P., pursuant to which these lenders or their designees agreed to lend the company money in the bankruptcy as its debtors-in-possession lenders. In its announcement last month, the company stated it secured $4 million in post-possession debtor in possession financing.

The DIP lenders have proposed to purchase substantially all of the company's assets and, subject to Bankruptcy Court approval, would serve as the “stalking horse bidder” in the 363-sale process. Qualified bidders must submit a higher or better bid than the offer from the stalking horse bidder.

For its 2015 fiscal year, the company had revenue of approximately $90 million. During 2016, the company suffered sales decreases that led to what the company characterized as “severe cash flow problems.”

“The deteriorating sales were at least partially due to macro-economic issues affecting the restaurant industry as a whole, and the fast-casual sector in particular, resulting in decreasing sales trends for the company,” Cosi states.

The company's stock was delisted from the Nasdaq stock market on Oct. 10 for failure to satisfy the stock exchange's continued listing requirements. Cosi in late August announced that Board of Directors terminated RJ Dourney as CEO and president, effective immediately. Patrick Bennett, a member of the Board of Directors, is now serving as interim CEO and president.

In August, Cosi reported for the 2016 second quarter a net loss of $3.1 million, or $0.07 per diluted share, compared to $3.9 million, or $0.08 per diluted share, in the second quarter of 2015.

BOSTON—Locally-headquartered casual restaurant chain Cosi Inc. is seeking qualified bidders in the Section 363 sales process of the U.S. Bankruptcy Code to purchase substantially all of its assets

The company as of Oct. 1, 2016 operated 76 restaurants, of which 45 are company operated and 31 are franchised locations. At the end of June, Cosi operated 104 restaurants, 74 company-owned and 30 franchised owned in 15 states, the District of Columbia, the United Arab Emirates and Costa Rica.

The company, known for its open-flame stone-hearth oven that makes its signature flatbread, filed for Chapter 11 bankruptcy protection on Sept. 28 in the U.S. Bankruptcy Court for the District of Massachusetts (Eastern Division). At the time, the company reported that its board of directors unanimously determined that a sale in Chapter 11 was in the best interest of the company and its creditors. The process allows Cosi to continue normal business operations during the Bankruptcy Court supervised sale process.

The bidding procedures and sale schedule, which are pending approval of the Bankruptcy Court, will be available on or about Oct. 20 and all bids must be received by Nov.14.

Prior to the Chapter 11 filing, Cosi entered into a non-binding term sheet with its lenders, AB Opportunity Fund LLC, AB Value Partners, L.P., and Milfam II L.P., pursuant to which these lenders or their designees agreed to lend the company money in the bankruptcy as its debtors-in-possession lenders. In its announcement last month, the company stated it secured $4 million in post-possession debtor in possession financing.

The DIP lenders have proposed to purchase substantially all of the company's assets and, subject to Bankruptcy Court approval, would serve as the “stalking horse bidder” in the 363-sale process. Qualified bidders must submit a higher or better bid than the offer from the stalking horse bidder.

For its 2015 fiscal year, the company had revenue of approximately $90 million. During 2016, the company suffered sales decreases that led to what the company characterized as “severe cash flow problems.”

“The deteriorating sales were at least partially due to macro-economic issues affecting the restaurant industry as a whole, and the fast-casual sector in particular, resulting in decreasing sales trends for the company,” Cosi states.

The company's stock was delisted from the Nasdaq stock market on Oct. 10 for failure to satisfy the stock exchange's continued listing requirements. Cosi in late August announced that Board of Directors terminated RJ Dourney as CEO and president, effective immediately. Patrick Bennett, a member of the Board of Directors, is now serving as interim CEO and president.

In August, Cosi reported for the 2016 second quarter a net loss of $3.1 million, or $0.07 per diluted share, compared to $3.9 million, or $0.08 per diluted share, in the second quarter of 2015.