Clothestime Inc. said Wednesday that a bankruptcy court has signed a reorganization plan, clearing the way for the struggling apparel company to emerge from bankruptcy.
Clothestime and its affiliates will continue to operate more than 260 women's apparel stores located primarily in California, Florida and Texas.
Under the plan, which was filed March 21, creditors will own 75% of the reorganized company's common stock. The remaining 25% of the stock will be distributed to company management.
Existing shareholders will get no distributions under the plan and their stock will be canceled.
The Anaheim-based chain had been in bankruptcy proceedings since December 1995. The company posted a loss of $3.4 million for the first quarter this year as revenue dropped 2.8% to $42.5 million. A year earlier, the company had lost $5.8 million on $43.7 million in revenue.