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Escada To File for Bankruptcy Equivalent

>> Escada was considered one of the world's premier fashion labels in the '80s, but the German luxury label has since become downtrodden among design flops, weak sales for many seasons, and management upheavels.  Last month, the company's chairman Bruno Saelzer indicated that if the debt restructuring plan the company put forth to stockholders was not approved this month, the business would have to be dissolved.

A month later, Escada has failed to reach the required stockholder acceptance level for its bond exchange plan and is meeting today to discuss plans to file for insolvency. Under German law, planned insolvency is the closest procedure to bankruptcy, as the country does not have the equivalent of Chapter 11. Saelzer had wanted to avoid insolvency out of concern for the brand’s image, and tried to keep up appearances in the last month by releasing a Fall 2009 campaign with Eva Herzigova photographed by Peter Lindbergh and last week, images of the brand's Spring 2010 collection.  The management was to meet today to discuss further steps.

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