From The E28 Wiki

Parking Brake Button Stuck

By rexmo, Tue Jan 31, 2006

Original thread: The button on my emergency brake is permanently depressed

Problem: The button on my emergency brake is recessed to the point I can't use it.

Cause: The plastic grip on the e-brake handle has slid forward.

Solution: Grasp the plastic grip firmly and pull it back into its original position. Twisting back and forth may be helpful.