Fashion designer Karen Millen has been declared bankrupt over unpaid tax in the British High Court on Tuesday and stands a chance of losing her £ 3 million luxury mansion in Kent along with any other properties and cars.
The designer who founded her eponymous high street label more than 35 years ago, failed to pay £ 6 million to HM Revenue and Customs following her involvement in a tax avoidance scheme.
In 2001, her accountants advised her to enter a tax avoidance scheme, Millen told the Times, the validity of which was successfully challenged by HMRC in 2010.
The designer blames Kaupthing, the collapsed Icelandic bank that backed the 2004 deal, rather than her own financial decisions for her current financial downfall.
In 2004, Millen sold her share in the Karen Millen retail business for £ 35 million to Aurora Fashions, (which was then taken over by Aurora’s parent company Kaupthing) – a deal that involved Millen signing away the rights to use her own name.
Millen, who was awarded an OBE in 2008, claims to have been a victim of fraud after losing large amounts of money as a result of the bank’s insolvency. She also said that Kaupthing’s administrators, which now own the Karen Millen brand, also prevented her from starting again, after she wanted to launch a range of new homeware and lifestyle business, focused on the US and China markets using the trademarks ‘Karen Millen’ and ‘Karen’.
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A High Court judge ruled against it because it would be “confusing” to the original brand.
Millen also lost money in the 2008 financial crisis after other Icelandic investments failed.
In an attempt to recover the tens of millions Millen and Stanford – and many other investors – lost in Iceland’s financial meltdown, they have pursued a few legal claims against the estate of Kaupthing. The designer says the last nine years have been “one long legal battle” that has left her exhausted and ready to “finally put the past behind me”.
Millen has not designed clothes for the company that bears her name for well over a decade, yet she remains forever yoked to the business that she started with Stanford in 1981, when she was just 19.
