True Religion has received Chapter 11 Bankruptcy approval from Delaware to slash their nearly 500 million dollars in debt by 70 percent through a debt-for-equity swap.

Earlier this year, the company filed for bankruptcy so they could grapple their debt and declining sales. Court documents said the company only had 243.3 million dollars worth of assets.

As reported by Law360, U.S. Bankruptcy Judge Christopher S. Sontchi overruled an objection from the U.S. trustees office over the extent of third-party liability releases being granted and whether creditors had been given an adequate chance to consent to them.

True Religion argued that the releases were proper and necessary so they could negotiate a plan that provided value to creditors that would be out of the money without them. The releases’ existence went out with notices, creditor ballots and the disclosure statement, according to the brand's attorneys said.

Many retailers have announced bankruptcy this year, including Gap, Toys 'R Us and Teavana. U.S. mall vacancies are also rising, with an 8.3 percent increase according to Reuters.

True Religion, like many fashion brands, has been victim to the struggling retail climate. Also, as consumer habits have shifted more to online, and customers are going for either fast-fashion brands or high-end luxury goods, an expensive denim brand that doesn't quite meet the luxury marker has a tough time finding a customer.

True Religion is hoping to bounce back through global e-commerce expansion and targeted campaigns to increase their brand awareness and licensing.

They also have plans to do more pop-up locations and launch "Last Stitch" branded locations.

photo: via Truereligion.com