Caffè Nero North America has been selected as the stalking horse bidder in the court-supervised sale of assets belonging to US coffee chain Compass Coffee, following approval from the US Bankruptcy Court for the District of Columbia.

On Friday, 23 January 2026, the court approved bidding procedures governing the proposed sale, including the designation of a stalking horse purchaser, bidder protections and the timetable for the auction and sale hearing.

Under the stalking horse agreement, Caffè Nero North America has submitted an offer to acquire substantially all of Compass Coffee’s assets for a cash purchase price of $2.9 million, alongside the assumption of certain specified liabilities.

The bid remains subject to higher or better offers submitted in line with the court-approved process.

The agreement also includes a proposed break-up fee equal to 4% of the cash purchase price, payable under certain circumstances if the transaction does not proceed.

Compass Coffee filed for Chapter 11 bankruptcy protection earlier this month as it seeks to restructure parts of its business in response to lower foot traffic and rising costs in Washington, DC. The company said its cafés will continue operating throughout the process.

In court filings, Compass cited structural changes to Washington’s retail environment since 2020, including sustained declines in downtown office occupancy and weekday footfall, alongside legacy lease structures and fixed operating costs that are no longer aligned with current demand.

As part of the restructuring, the company confirmed plans to close its Ivy City roasting facility, stating that the site was built to support a scale of production that no longer reflects today’s retail environment and is no longer economically viable within the city.

Compass said the Chapter 11 process will allow it to address legacy costs, rebalance operations around current demand and focus resources on its strongest neighbourhood cafés.

Founded more than a decade ago, Compass Coffee operates 25 cafés across Washington, DC, Maryland and Virginia, and has said it will continue trading while working to stabilise the business and align its operating structure with current market conditions.