PROVIDENCE, R.I. (AP) – A regional group of Dunkin’ Donuts franchisees has placed a bid on the bankrupt Bess Eaton chain, topping an offer by the Canadian company Tim Hortons.

The 14 Dunkin’ Donuts franchisees on Wednesday offered $36 million for the chain’s assets, a lawyer for the group told Projo.com, the Web site of The Providence Journal.

Tim Hortons had struck a tentative deal with Bess Eaton, offering $35.5 million for 42 of the chain’s 48 stores in New England, but a bankruptcy court judge opened the process to other bidders. Tim Hortons, a coffee-and-doughnut chain that has diversified its menu, is headquartered outside Toronto, and is owned by Wendy’s International Inc., of Dublin, Ohio.

If approved by the U.S. Bankruptcy Court, the sale of the Bess Eaton Donut Flour Co. Inc. would end 50 years of ownership by the Gencarelli family.

Under the deal it proposed, Tim Hortons would pay off the nearly $15 million that Bess Eaton owes to its creditors and another $14 million to cover owner Louis Gencarelli’s personal debt.

The Tim Hortons’ offer does not include Bess Eaton’s bakery or headquarters, which company lawyer Allan Shine said are expected to sell for a combined $3 million. It also leaves out six Bess Eaton shops.

An auction – and the potential sale of Bess Eaton – is scheduled for Friday in the federal bankruptcy court.

AP-ES-04-21-04 1838EDT