Happier times: Betsey Johnson at an event in July in New York City. Photo: Getty Images

Betsey's bailout could be Steve's steal.

Steve Madden has taken over a $48.8 million loan to Betsey Johnson LLC that is currently in default. SEC documents filed Thursday show that if this loan is not paid by August 20, 2012, Madden will end up owning the brand and possibly the collateral that secured the loan in the first place – namely the designer and her business partner Chantal Bacon's personal assets, as well as the company's intellectual property, aka its brand name.

Madden spent about $27.6 million to buy out this loan through a wholly owned subsidiary formed on Thursday specifically for this transaction.

The shoe and handbag maker is no stranger to the 68-year-old Johnson's products and the brand. Madden holds the license for handbags, small leather goods, belts and umbrellas under the Betsey Johnson and Betseyville brands.

This financial snafu comes at a time when it could put a damper on her spring 2011 runway show at the Tents at Lincoln Center. However, as of press time, there was no word about a change, so it seems the show will go on.

Meanwhile Madden's company seems to be on fire. The maker of Madonna's Material Girl line and Olsenboye shoes recently bought handbag maker Big Buddah for about $11 million in cash. Last month, it made a $5 million investment in Bakers Footwear Group. The acquisition of Betsey Johnson could end up being a well-priced feather in Madden's cap.

Calls for comment to Johnson were not returned. A Madden spokeswoman declined to comment at this time.