Designer Karen Millen is pursuing legal action against the estate of Kaupthing bank for the way in which she lost her near 7% interest in Mosaic Fashions when the bank went bust in 2008.
Millen, who was among witnesses who gave evidence during an examination of allegations that Kaupthing manipulated the market, is pursuing legal action over the way she lost a 7% interest in Mosaic Fashions (now known as Aurora Fashions), the operator of womenswear chains Coast, Oasis and Warehouse.
Kaupthing is at the centre of investigations into allegations that it covered up toxic debts and manipulated shares prior to its demise.
She told the Guardian: “In my opinion it is wrong that a bank can pretend to have money and security which it doesn’t have, generate a false balance sheet and use its own customers to fund acquisition ambitions. This is wrong and I am not going to rest until I have my company restored to me.”
Millen, who set-up the Karen Millen label with her former husband and All Saints co-founder Kevin Stanford in 1983, wants to start trading again but also faces potential wrangling over trademark infringement.
Karen Millen, which is controlled by the administrator of the now defunct Icelandic bank Kaupthing which collapsed in 2008, own the rights to the Karen Millen brand name and has warned of trademark infringement if Millen returns to business under the brand name Karen or KM.
Millen and Stanford are pursuing a series of legal claims against the estate of Kaupthing bank and the sums sought are believed to exceed £500m.
This time last year Stanford claimed that Kaupthing operated a scheme to prop up its shares for at least a year before it hit the buffers in October 2008.
In a letter written in March 2011 Stanford alleged that British savings made through online savings account Kaupthing Edge were funnelled to the bank’s wealthiest customers on condition they used the cash to buy shares in the bank.
Stanford said that cash raised as deposits by British savers was swapped for loans held by its Icelandic parent company. The cash was passed to a Luxembourg subsidiary where it was used to fund the share purchase.
The scheme allowed Kaupthing to stave off rumours about its financial health and to allow Kaupthing executives to sell some of their own shares in the bank, said Stanford.