Lugano Holdings Inc., an operator of high-end jewelry boutiques owned by Compass Diversified, has filed for bankruptcy months after it accused its former chief executive of stealing millions of dollars from the business and misrepresenting investment deals with high net worth clients.

The retailer sought court protection Sunday in Delaware saying it has an offer to sell the business to Enhanced Retail Funding, a deal that must be approved by a bankruptcy judge and is subject to better offers at a Chapter 11 auction. Lugano listed at least $100 million in assets and more than $500 million in liabilities on its Chapter 11 petition.

The bankruptcy filing comes months after the departure of former Lugano Chief Executive Officer Mordechai Haim Ferder, who established the business in 2004. Fo

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