The American shoe retail chain, which filed for bankruptcy protection last October, said that it is in the process of winding down its business “in an orderly fashion over the next couple of months.” A bankruptcy judge reportedly gave it permission Wednesday to liquidate the merchandise at 56 of its 213 stores that are still open, after the termination of discussions for its possible takeover by an unnamed fashion company.

On Jan. 2, Bakers Footwear Group had asked the bankruptcy court for permission to liquidate the company if it could not find a buyer for its assets. The retailer then raised about $8.7 million by liquidating inventories at 150 of its stores, which was less than it had hoped for. In case of success, it might have tried to get out of the bankrupcy proceedings by operating as a smaller chain.

Bakers , which is still listed on the stock exchange, admitted last Monday in a filing with the U.S. Securities & Exchange Commission that it was unable to comply with the financial convenants of a credit facility granted by its main lender, Salus Capital Partners. It also said that it would be unable to file any more financial statements.

Bakers had an outstanding balance of only $2 million on this credit facility as of Dec. 29. Technically, Salus did not take any action to accelerate debt repayments or to terminate the agreement, but it has refused to fund any further purchases of inventories for Bakers' stores.