The Icelandic retail investment group Baugur has been forced to file for bankruptcy after the district court in Reykjavik threw out plans to safeguard the business and refused to extend the moratorium protecting the group from its creditors.
Talks with creditors Landsbanki collapsed last month, at which point the investment group applied to enter the moratorium process which is similar to the Chapter 11 protection afforded to business in the US.
According to reports Baugur’s chairman Kristin Johannesdottir said “The court’s ruling today is a disappointment to everyone at Baugur. We believe that the company fulfils all the conditions for the extension and that the restructuring plan was viable. However, following the ruling, we have no choice but to file for bankruptcy.”
BG Holding, the Icelandic group’s UK division is already in administration but the UK arm owned a 49% stake in the UK fashion chain Mosaic which also recently collapsed.
Source: Thomson Merger News