Bosworth is president of a Santa Monica, Calif.-based advisory firm NTH Advisory Group, which jointly owns Hedwigs with a private equity investor he declined to identify.

"It is a very challenging time in the debt markets," said Mike Hessling, president of 155 East Tropicana, Hooters' parent company.

Hessling said during a second-quarter earnings call that he has not yet heard whether Hedwigs has obtained financing for the deal.

Speculation surrounding the Hooters sale comes a week after the neighboring Tropicana postponed a $2.5 billion redevelopment project at the 34.5-acre property, citing a recent downturn in the credit market.

Bosworth said part of the business plan for Hooters is to upgrade a property that went through a $130 million renovation 17 months ago when it was changed over from the San Remo.

Bosworth has an extensive history with the property, something he believes gives him an advantage over other developers who may be interested in Hooters.

He was a real estate and financial adviser to Florida-based Hooters, which has a two-thirds ownership stake in the hotel.

Bosworth said he located the San Remo, led the due-diligence team, raised the capital and structured the transaction.

The agreement to buy Hooters has been amended twice.

Hedwigs has made $1.5 million in nonrefundable deposits against the purchase price directly to 155 East Tropicana.

Language in the second amendment allowing Hooters to solicit additional offers has added to the speculation Hedwigs' deal might be at risk.

Hedwigs has until Nov. 15 to pay another $1.5 million, and Hooters can not enter another agreement before that date.

The second amendment also sets a closing date of Dec. 31.

The buyer can ask for extensions until June 30 on a month-by-month basis paying a $500,000 nonrefundable, non applicable fee.

After the earnings call, two bond analysts encouraged investors to sell Hooters' 8.75 percent senior secure notes due 2012.

Barbara Cappaert, a KDP Investment Advisors bond analyst, rated the notes "sell," citing the second amended agreement.

"The buyout group has not made public any visible signs of financing," Cappaert wrote in a note to investors. "Our discussions among bankers yields no leads as to where the money will come from."

She added there has been no additional interest in the "fledgling asset" by any third parties.

Andrew Zarnett, Deutsche Bank bond analyst, also rates the notes "sell," saying the property's sale is unlikely given current market conditions.

Bosworth said he has not been very public with his plans because he wants to respect Hooters' business operation during the transaction.

However, with the recent credit market crunch combined with the amendments to the purchase agreement and bond analysts' critiques, Bosworth said he felt it appropriate to address the pending purchase.

"The deal is absolutely not falling apart," Bosworth said. "With the capital market credit crunch there has been a little bit of wait and see."