Einstein/Noah Bagel Seeks to Sell Assets

Einstein/Noah Bagel Corp., the No. 1 U.S. chain of bagel shops, said it will ask a bankruptcy judge for permission to sell most of its assets for $145 million to the equity firm Three Cities Fund III. Golden, Colo.-based Einstein/Noah, with 461 stores in 29 states and the District of Columbia, filed last April in U.S. Bankruptcy Court in Phoenix for Chapter 11 protection from creditors, citing heavy debt and weak-performing stores. The company said Monday that New York-based Three Cities Fund, part of Three Cities Research Inc., would pay $145 million in cash and assume $22.7 million in debt for the assets. Einstein/Noah listed $341.8 million in assets and $249.5 million in debt in a November report to the Securities and Exchange Commission. A hearing to consider bidding procedures will be held Feb. 26 in Phoenix, the company said. Eatontown, N.J.-based New World Coffee-Manhattan Bagel Inc. tried unsuccessfully last August to buy Einstein/Noah, offering $55 million in cash and 45% of the combined company to creditors. New World officials weren’t immediately available to comment on the proposed Three Cities transaction. Shares of Einstein/Noah fell 1 cent to close at 10 cents in Nasdaq trading. Shares of New World fell 41 cents to close at $1.56, also on Nasdaq.