Restaurant owner SSI Group Holding Corp., which operates and franchises the Souper Salad and Grandy's concepts, has served up a second bankruptcy filing and now plans to sell a portion of its business back to its private equity owner, Sun Capital Partners Inc.

SSI, which is 45% owned by an affiliate of Sun Capital Partners and 55% owned by affiliates of Summit Investment Management LLC, has secured a more than $6.05 million debtor-in-possession loan to fund operations during the Chapter 11 filing it made Wednesday in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.

The DIP funds will help sustain SSI until the sale of its Grandy's restaurant brand to stalking-horse bidder Captain D's LLC, which is a Sun Capital Partners affiliate, for $6 million in cash plus assumed liabilities. The bid is subject to adjustments.

SSI is also looking for a buyer for its Souper Salad restaurants but doesn't yet have a stalking-horse bidder in place.

Judge Mary F. Walrath of the Wilmington court will consider SSI's interim use of its cash collateral and $1.3 million of its DIP loan on Thursday.

SSI owns, operates and franchises the two restaurant concepts in 14 states in the U.S. Souper Salad sells salads, soups, bakery items and hot entrees buffet-style while Grandy's offers a menu of comfort food and is known for its chicken, vegetables and rolls. The DIP from Wells Fargo Capital Finance LLC consists of a $2.36 million revolving credit facility and a $3.69 million term loan. The DIP is priced at 12.5% and matures the earliest of four months from the petition date and the sale of its assets. The interest rate is equal to LIBOR plus 950 basis points, with a 3% floor on LIBOR or prime plus 750 basis points, with a 5% floor on prime. If the company defaults, the interest rate increases by 200 basis points.

Wells Fargo is owed more than $3.98 million in prepetition secured debt, which will be repaid through the DIP loan, court papers said. So really, SSI will only have $2.07 million from the DIP to spend on sustaining operations.

The DIP has a $75,000 closing fee, a 0.5% unused revolver fee, a $1,000 per month revolver servicing fee and a 3.25% letter of credit fee.

The DIP requires the debtor to sell its assets within 85 days of its bankruptcy filing.

Under the proposed bidding procedures for the sale of its assets, the debtor wants to set a deadline for competing bids 20 days from the bidding procedures approval, hold an auction five days later and schedule the sale hearing for five days after the auction, court papers said.

If the stalking-horse bidder doesn't win the auction, it would receive a $100,000 breakup fee and up to $200,000 in expense reimbursement. There is a $600,000 deposit required for the sale.

Competing bidders would initially have to offer $6.4 million for the Grandy's assets, equal to $100,000 more than the stalking horse, plus the breakup fee and expense reimbursement. During the auction, bids would increase in $100,000 increments.

Through the sale of the Souper Salad assets, there will be a 10% deposit required. If there is an auction held for the Souper Salad assets, bids would increase in $50,000 increments. Bidders could also make combined bids for both Souper Salad and Grandy's, court papers said.

There has not yet been a bidding procedures hearing scheduled.

The Addison, Texas-based restaurant chain owner filed for Chapter 11 with three affiliates, Souper Salad Inc., SSI-Grady's LLC and Souper Brands Inc. The debtor will also ask Walrath to administer the cases jointly during Thursday's hearing.

SSI blamed its second trip to Chapter 11 on the difficult economic environment, which has persisted in the restaurant industry since 2008 and caused its cash flow to deteriorate, constrained its liquidity and reduced its profitability, court papers said. SSI exited its first bankruptcy on June 14, 2006. SSI has been unable to comply with the obligations of its prepetition senior secured loan and its subordinated secured loan, leading it to default on its senior secured debt on June 15.

The debtor owes $37.17 million on its subordinated secured debt with SummitBridge National Investments LLC as the administrative agent and Sun Capital Partners as a lender.

SSI also blamed its bankruptcy filing on the steep rise in food costs, above-market rent and severe weather in Texas during the 2010-2011 winter, which decreased traffic at its restaurants. As of Jan. 3, the company had 146 restaurants, of which 72 are company-operated Souper Salads; eight are franchised Souper Salads; three are company-operated Grandy's; and 63 are franchised Grandy's. Recently, the company closed 24 underperforming Souper Salad locations.

The company has 1,300 employees.

The debtor started its Souper Salad operations in 1978 with restaurants in Texas, Colorado, Arizona, New Mexico, Oklahoma, Nevada, North Carolina, Kansas, Utah, South Carolina, Georgia, Idaho and Tennessee. Grandy's began its business in 1973 with restaurants in Texas, New Mexico, Oklahoma, Kentucky, Georgia, Louisiana, Indiana and Florida.

Souper Salad first filed for Chapter 11 on June 6, 2005, in the U.S. Bankruptcy Court for the District of Arizona in Phoenix. When it first filed for bankruptcy protection it was owned by PE firm Saunders Karp & Megrue and operated 91 stores in 12 states, but Sun Capital bought it out of bankruptcy.

Souper Salad purchased the Grandy's chain from Spectrum Restaurant Group Inc. for $6.77 million in 2007, according to The Deal Pipeline.

SSI's largest unsecured creditors are Glazier Foods Co. of Houston ($470,476), Valassis Lockbox Service of Windsor, Conn. ($181,614), Vistar Corp. of Henderson, Colo. ($126,119), Pyro Brand Development LLC of Dallas ($95,683) and CNL APF Partners LP of Orlando, Fla. ($89,408). The company listed its assets at $23.9 million and its liabilities at $47.5 million.

Morgan Joseph TriArtisan LLC is its investment bank.

Debtor counsel is Scott Rutsky, Adam Berkowitz and Richard Corbi of Proskauer Rose LLP and Mark Felger of Cozen O'Connor.