Kansas City, Mo ? Bankrupt Vanguard Airlines Inc. has rejected a buyout offer from a group of investors headed by the owner of the Hooters restaurant chain.

Vanguard attorney Daniel Flanigan called the offer from Hooters Air “inadequate,” though he would not disclose the terms.

He spoke during a hearing in U.S. Bankruptcy Court.

Vanguard has set an Oct. 3 deadline for investors, including Hooters Air, to come up with another offer. At that point, Vanguard plans to reduce its skeleton staff to 11 employees, who will help sell off the company’s assets, Flanigan said.

Also in court Wednesday, judge Jerry W. Venters approved Vanguard’s request to begin selling off assets, including aircraft parts and computer equipment.

No one representing Hooters Air was in court Wednesday.

According to court records, Vanguard’s assets are worth about $4.6 million. With some safeguards for creditors in place, Vanguard wants the bankruptcy court to allow it to sell some of its assets piecemeal, without court approval for each transaction.

Besides spare parts, ground equipment and computers, Vanguard wants to sell fuel inventory, beverage and food supplies, and vehicles such as catering trucks.

About half the aircraft parts are for the Boeing 737, older planes that Vanguard was retiring at the time of its shutdown.

The Kansas City, Mo.-based discount airline abruptly stopped operating on July 30, laying off 90 percent of its employees and filing for Chapter 11 bankruptcy protection.

A group headed by the owner of the Hooters restaurant chain has offered to buy some of Vanguard’s assets and establish a new commercial airline based in Kansas City.

Hooters Air LLC, led by Hooters of America chairman and owner Robert H. Brooks, has not revealed details about the plan.

All of Vanguard’s airplanes were leased, but Hooters Air has said it plans to buy airplane parts, ground equipment, furniture and fixtures.

Aviation analysts have said the main asset that any potential buyer would want through the bankruptcy process is Vanguard’s operating certificate.