In September 2010 the American investor Nicolas Berggruen bought the Karstadt business to save it from insolvency.
The liquidator of Hertie claimed the department store chain got into difficulties due to improperly high rent payments to the real estate owners, however as seen in the case of Arcandor's bankruptcy in June 2009, the whole German department store sector experienced severe difficulties during these times.
From 2004 to 1 March 2009, Middelhoff was chairman of the supervisory board of Arcandor (previously KarstadtQuelle AG), and CEO of the company.
Arcandor |
The Karstadt Warenhaus AG, which is what his chain of stores was called by 1920, continues as Arcandor.
On June 5, 2009 several media sources reported that the German justice minister Brigitte Zypries had recommended that the state prosecution service look into allegations of fraud against Middelhoff, based on the fact that he and his wife held shares of an investment fund that bought real estate from Arcandor and then allegedly leased it back it to Arcandor for unusually high rental fees.