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2009 August 13

Escada Files for Bankruptcy

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(NEW YORK) Troubled fashion house Escada may be in its last days of existence. After months of searching for a financial solution, the company has filed for bankruptcy this morning, Bloomberg reports. A month ago, Escada chairman Bruno Saelzer said that the company only had enough liquidity to last through August, though a state-aided bailout plan was proposed. Escada asked investors to forego over half of their investments in a bond swap to exchange €200 million in seven-year bonds by the end of July, to earn support from its banks. At least 80% of bond holders had to agree to plan for it to be passed, and reportedly only received such backing from about half its investors. The thirty-three-year-old company, as of this afternoon, had a market value of only 20.7 million euros, having lost 72% of its share value in the last three days. It appears inevitable that the company will cease trading.
EMILY GYBEN



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