Escada USA Inc. filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York on Friday, a day after the parent company, Escada AG, opened preliminary insolvency proceedings in Munich.

This story first appeared in the August 17, 2009 issue of WWD.  Subscribe Today.

The company said the Chapter 11 filing is intended to stabilize Escada’s important American business, which in fiscal 2007-2008 contributed about 20 percent of Escada brand sales. Escada furthermore described the move as “a crucial first step in the overall restructuring of the group.”

The U.S. filing was expected considering the Munich-based company said Friday that restructuring was a possibility.