The designer house, with its namesake as its creative director, is 90 percent owned by equity firm Castanea Partner and will still operate, but the brand's 350 strong staff in 63 stores are likely to be let go.
Johnson, who is turning 70, will stay on to continue designing her range, with a runway show still planned for September, however will focus on her lower-priced line, which is sold in select retailers and American department store Macy's.
In a statement, Johnson simply said "I feel so sad for my store people and all my pink girls. They live and die for me. But I need to be better. I really need to work well and be more efficient".
"The decision to seek protection under Chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC's cash-flow problems" added the company's chief financial officer, Jonathan Friedman.
"After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming" he added.
Betsey Johnson with daughter and muse Lulu
It's not all bad news for the eccentric designer, whose signature move is a cartwheel at the end of each show. Johnson has signed on to star in a new reality show, shooting this Summer. The show will be called 'Betsey + Lulu' following the mother and daughter duo as they embark on Lulu Johnson's fashion line
