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House of Fraser investor Baugur applies for bankruptcy protection

REYKJAVIK - Icelandic retail investor Baugur, which holds stakes in British high street stores House of Fraser, French Connection and Debenhams, said Wednesday it had applied for bankruptcy protection.

"This morning (Wednesday), Baugur Group ... and a number of its wholly owned subsidiaries ... have applied to the District Court in Reykjavik to enter into the moratorium process," the company said in a statement.

"This action has been taken in order to protect the group's assets as well as the interests of all creditors," it said, adding it had made the move after restructuring efforts collapsed.

The decision came after the company said last week it would close its Reykjavik head office, laying off all 15 employees there, and would cut its administrative staff in Britain from 29 to 16 employees.

Companies in which Baugur has investments employ 50,000 people worldwide.

In December, the heads of Baugur were charged with tax evasion amounting to 2.4 million dollars (1.9 million euros) from 1998 to 2003.

The December charges marked the third time since 2002 that they and the company had been pursued by Icelandic authorities on suspicion of embezzlement as well as accounting irregularities, although many of the charges had previously been thrown out by the Supreme Court.