The US Bankruptcy Court for the District of Delaware has approved Syms Corp and its subsidiary Filene's Basement disclosure statement, describing its plan to exit bankruptcy.

The disclosure statement, which describes the company's plan was approved by the court on 13 July. 

The debtors, the Official Committee of Unsecured Creditors, and the Official Committee of Equity Security Holders, which represents minority shareholders, support the plan. 

The debtor will now seek support for the plan among creditors. A certain percentage of creditors need to vote to approve the plan. 

The court will then consider any objections that have been filed in this period and hold a confirmation hearing to decide whether it has approved the plan will take place on 29 August.

The plan is expected to allow Filene's Basement creditors to receive a recovery from the sale of Syms' assets. If it is approved, Syms creditors will be paid in full.

The plan creates a newly constituted company with a new capital structure, which will dispose of Syms real estate assets over time. 

Under the plan, shareholders, except the majority shareholder, will have the choice to buy more than 10m new shares at $2.49 per share. 

Proceeds from this rights offering, as well as money from any real estate dispositions, will be used to pay for the company's bankruptcy exit and other costs.

Any remaining proceeds will be split between creditors and the majority shareholder, with creditors receiving 60% and the majority shareholder receiving 40%, until the majority shareholder is paid US$10,725,761.

Majority shareholder Marcy Syms will sell her shares to the newly constituted Syms for $2.49 per share.

Last November, it was announced that the Filene's Basement and Running of the Brides names were to be sold at auction as part of the liquidation of discount clothing retailers Syms Corp and Filene's Basement.