BERLIN — Insolvency proceedings over the assets of Escada AG were opened Sunday at the Munich Municipal court.
This story first appeared in the November 3, 2009 issue of WWD. Subscribe Today.
The acting insolvency administrator, Munich attorney Christian Gerloff, now has the power of administration and control over all assets and the power of representation of Escada. The company filed an insolvency petition on Aug. 13.
Gerloff is engaged in advanced negotiations with a handful of potential buyers for Escada, including Megha Mittal, daughter-in-law of the Indian steel billionaire Lakshmi Mittal, and Sven Ley, son of Escada founders Wolfgang and Margaretha Ley. Reports also say the U.S. financial investment firm Oaktree, a second investment firm and possibly Rustam Aksenenko, once again Escada’s largest shareholder, are in the final round. A decision is expected as early as the end of this week.
In a surprise move late Friday, Escada pulled out of the negotiated May sales contract with Munich-based Mutares AG for three of the four Primera brands — Laurel, Apriori and Cavita. The brands are now to be sold to Endurance Capital, also based in Munich. A spokesman said the agreement with Mutares had run into delays brought about by Escada’s insolvency, and that Endurance Capital had then emerged as a new bidder offering better terms as well as a better concept for the Primera brands.
Mutares had reportedly paid the symbolic price of one euro, or $1.48, for Primera, and the sale had required a significant writedown in Escada’s fiscal 2008-09 second-quarter period ending April 30. While the Escada spokesman wouldn’t disclose the terms of the new deal, he said Endurance had paid a “recognizable price.”