Busy Phillips and Joe Manganiello
Credit: Stefanie Keenan/WireImage

We've all experienced a wardrobe malfunction here and there, but for the stars the stakes are usually much higher. While a run in your tights might forever be uploaded to a friend's Instagram account, for someone like Busy Phillips, it means the gaping holes in your designer dress may be witness by Oscar winners and captured by red carpet photographers.

The actress and mom to two daughters shared the story of her biggest fashion nightmare with InStyle at Tuesday's Dance Party with New Balance and James Jeans powered by ISKO event in Los Angeles. "I had a borrowed beautiful dress," she told "But, I wore it to a very fancy [pre-Academy Awards] event and on both sides in the exact same spot on the thighs, the seam was ripped."

"It had been done in a showroom on purpose, but for some reason in the fitting with my stylist neither one of us noticed it. Once I was on the red carpet I realized it," Phillips said. "I had to walk with my hands flat against my thighs on both sides all night."

Busy Phillips, Mandy Moore, Minka Kelly
Credit: Stefanie Keenan/WireImage

At the dance party, however, Phillips played things safe by keeping things casual (there was no sign of a fashion mishaps!) and opted for a Michael Star shirt, James Jeans, and New Balance sneakers. Joe Manganiello (at top, with Phillips), Mandy Moore (above, center), and Minka Kelly (above, right), also went with black denim pants; other guests included Rashida Jones, Abbie Cornish, Jordana Brewster, and jewelry designer Melinda Maria.

—With reporting by Heather Newgen