German fashion house Escada filed for bankruptcy in the Munich municipal court after a rescue plan failed to find sufficient backing among investors. According to the AP, "Insolvency became inevitable for the luxury women's fashion label after a rescue plan failed to find sufficient backing among investors. The emergency plan had called on bondholders to sacrifice more than half their investment to help the company obtain a 200-million-euro ($282 million) bank loan. By the time the approval deadline expired on Tuesday afternoon, only 46 percent of bondholders had agreed to the deal - far short of the 80 percent threshold required to secure Escada's short-term survival."
Escada was founded by Margaretha and Wolfgang Ley in Munich in 1978. It became a publicly-traded company in 1986, and by 1990 it had grown into one of the world's best-known fashion brands. The label, which has been popular among Hollywood celebrities such as Demi Moore, has struggled in recent years with internal management disputes, design flops, and a shrinking market for luxury fashion items.