Court clears way for Payless bankruptcy plan

A federal bankruptcy judge in Missouri has approved Payless Shoesource's plan to get out of bankruptcy.

The

was issued July 26. It allows Payless to proceed with a reorganization plan that includes closing around 700 stores. It also reduces the company's debt from $850 million to just over $400 million.

While court documents show most creditors supported the reorganization proposal,

entered August 2 allows Payless to continue negotiating settlements through Oct. 1, 2017.

Payless did not respond to a request for comment Wednesday night, but

a necessary step to build a stronger company. They said the decision was sparked by continued challenges of the retail environment.

Payless has about 800 employees at its Topeka world headquarters. About 150 workers have been laid off from the office since January.