Clothing company Betsey Johnson has filed for Chapter 11 bankruptcy protection. The fashion designer’s company claims to owe a substantial amount to creditors totaling over a million dollars, along with liquidation problems. The filing may result in 350 employees losing their jobs, meaning they will close more than 60 stores.
According to Forbes, the retailer owes outstanding debt to various service providers, vendors and manufacturers. Creditors who are owed money by the retailer include banks, jewelers and accountants. The rights of the brand were sold in 2010 by Steve Madden who claims the retailer will still continue to operate and produce orders previously requested. The clothing line is sold at different department stores such as Bloomingdales, Saks and Nordstrom. Many retailers claim they will still continue to sell the brand. The company claims that despite of the bankruptcy filing, Betsey Johnson will continue designing for the brand.

Madden claims the brand is still strong and committed to continuing growing their business. He claims their wholesale business has increased in 2012 by 50 percent. There have been reports of the company not performing well in recent years. When sales took a nose dive, a $48 million loan was forgiven by Madden. The company is hoping to gain approval of a debtor-in-possession (DIP) financing for $2.5 million. The funds would be used for company operation until the brand acquires a suitable liquidator or buyer. Betsey Johnson, 69, is known for yellow-hair, neon color designers and her end-of-the runway cartwheels.

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