Looks like American Apparel isn’t the only brand in trouble. Betsey Johnson has defaulted on a $48.8 million loan — and that’s not all. According to the Securities and Exchange Commission, Steve Madden agreed to takeover that loan on Thursday, which means that if Johnson doesn’t pay up, Madden could be her new boss.
According to Madden’s agreement, Johnson has until 2012 to pay back the loan — and if she doesn’t, Madden has the right to seize not only the assets of Johnson’s company, but her personal property as well.
The collateral for the loan includes the company’s intellectual property, so Madden could be in line for the labels it holds as licensee. Also included among the items securing the loan are “the borrower’s personal property, accounts, deposit accounts and cash, equipment, fixtures, general intangibles, goods [and] inventory.”
We hope, for Betsey’s and for our sake, that she rustles up the cash. ohnson will unveil her Spring 2011 collection on September 13th.