A plan to reorganize kamaaina retailer Hilo Hattie was approved by a U.S. Bankruptcy Court judge today.

The approval, which wasn’t contested, will allow the company to emerge from Chapter 11 by wiping out roughly $14 million of debts to keep the retailer with seven Hawaiçi stores and 170 employees in business while preserving numerous vendor relationships.
Confirmation of the plan had been expected since July when Maui Divers, a major creditor and Hilo Hattie vendor, withdrew an offer to buy the company and threw its support behind a competing proposal by another creditor, Royal Hawaiian Creations, which acquired control of Hilo Hattie through a stock purchase in June.
Royal Hawaiian Creations has already invested $1 million in Hilo Hattie, and will invest $3 million more to pay claims necessary for Hilo Hattie to exit bankruptcy about a year after it filed for protection.