Two companies seeking ownership of Briazz

Bankrupt sandwich-cafe chain Briazz soon will have new owners.

The question is: Who?

The company's board of directors must decide whether to sell the majority of its assets to Issaquah-based Organic To Go, or approve a bankruptcy organization plan that would cede ownership to Flying Food Group.

Briazz, which filed for Chapter 11 protection in June, received permission to share its reorganization plan with creditors in December.

Under that plan, Chicago-based Flying Food Group — which provides ready-made meals to airlines and grocery stores — would pay a modest $50,000 to unsecured creditors.

Secured creditors would receive the option to take a lump-sum payment or to receive a larger payment from its "available cash flow," spread out over the next seven years.

Creditors Laurus Master Fund, Spinnaker Investment Partners and Deutsche Bank London have rejected the reorganization plan.

In court filings, Laurus calculated under the reorganization plan that it would receive 7 cents on the dollar if it took the lump-sum payment and 11 cents if it agreed to hold out for payment from the company's future cash flow.

It said Briazz is unlikely to make the payments since it has never turned a profit.

The company lost $72 million prior to bankruptcy, and an average of $146,000 for each month it has been in bankruptcy.

"Why should this court believe anything has changed?" a Laurus attorney wrote.

A week before the company's Feb. 25 reorganization hearing, Organic Holding Co., which owns Organic To Go, offered to buy the majority of the company's assets for an undisclosed sum.

Organic To Go offers ready-made meals, prepared with organic ingredients, for pickup or delivery.

Cynthia Kuno, the bankruptcy attorney for Briazz, said the company has an obligation to find the highest return for its creditors. But the offers differ considerably in who benefits and by what amount.

"These things are not easy for the board to compare," Kuno said.

Briazz is scheduled to appear in bankruptcy court April 4. Kuno said the company's board "will move forward as rapidly as possible."

Veteran entrepreneur Victor Alhadeff founded the upscale sandwich shop in March 1995 with the aim of providing quick, affordable, healthy food for downtown office workers.

The company went public in May 2001 but warned a month later that its quarterly financial results would be "worse than expected."

The company blamed slow sales on the high office-vacancy rates that followed the dot-com crash.

Monica Soto Ouchi: 206-515-5632 or msoto@seattletimes.com