Warnaco Group Inc's reorganisation plan met with court approval yesterday, making way for the New York-based maker of Calvin Klein and other designer apparel to emerge from Chapter 11 with bank lenders getting 96.26 per cent of its shares.

Under the plan, which was first filed in early October, the banks will also get $101 million in cash and $200 million in new bonds.

However common shareholders - including the company's former president and chief executive Linda Wachner - will get nothing.

Despite this ruling, Wachner, who was ousted from the company in November 2001, will continue to fight for around $25 million in severance payments. She claims she helped engineer Warnaco's turnaround before her departure.

The company's earnings rose to $91 million in the first eight months of 2002 compared with $21 million in all of 2001.