Scott Barnes, a partner at Grant Thornton, said he had received expressions of interest from three or four potential buyers within an hour of his appointment. He hoped to be able to sell the 32-shop chain as a going concern.
"All the stores will be operating as normal for the time being, while the financial position of the company can be assessed in detail and the business stabilised," he said.
Ron Trenter, the former head of the Texas DIY chain who took over as chief executive of Upton & Southern eight weeks ago, said he had hoped to put the shops into administration, a form of protection against creditors, but was unable to bring the Reject Shop's bankers on board.
He said the decision to draw a line under the disastrous acquisition was good for Upton, a sleepy chain of three North-east department stores until its purchase of Reject Shop for pounds 2.3m in February 1994 gave it an unwelcome place in the limelight.
The acquisition rapidly turned sour. Last August the company warned that Reject Shop's financial and trading position had turned out to be worse than represented at the time of the deal.
In October, Upton raised pounds 5.5m in a share placing and open offer to try to stem losses, currently estimated at between pounds 100,000 and pounds 150,000 a week. It warned that without the fund-raising Upton itself would be unable to continue trading. Its shares, worth more than 200p five years ago and 60p at the time of the purchase, closed yesterday 0.5p down at 1.25p.
At the time of last October's share issue, Upton issued writs against five former Reject Shop directors. The action, alleging that the directors misrepresented the value of stocks and liabilities, is still outstanding.
The writs alleged that Reject Shop's board did not give a true and fair view of the state of the company's businesses. Upton also complained that cash-flow problems caused by a stock shortfall wrecked negotiations with a potential equity investor.
Mr Barnes said an early priority would be to resolve the issue of deposits, which some customers had made for items such as sofas that had not yet been delivered.
He also hoped that redundancies among the chain's 300 staff could be avoided if the shops were sold as going concerns, which he thought was "very likely".
The ill-fated acquisition of Reject Shop by Upton & Southern followed the appointment in December 1992 of Jeffrey Gould as chief executive of Upton, when the company was itself close to collapse. Mr Gould launched a successful debt restructuring programme with a rights issue, and started to turn around trading in the northern department stores.
In May 1993 he signalled his enthusiasm for an acquisition to double the size of the company and rushed into buying Reject Shop, which was already suffering from falling sales and high fixed overheads, such as rents on high-street sites.
Last month the extent of the problems at the Reject Shop became clear when Upton announced a loss of pounds 1.2m in the six months to January compared with a pounds 92,000 profit the previous year.Reuse content