Iceland Foods has appointed a new chairman after Jón Ásgeir Johannesson stepped down to defend himself against a lawsuit.

He was replaced by another Icelander Baldvin Valtysson, head of the London office of Icelandic bank Landsbanki and a non-executive director of Iceland Foods since June 2008. "I am delighted to welcome Baldvin to his new role as our chairman, and I and the rest of the Iceland Foods management team look forward to continuing to work with him to pursue our successful strategy of the past five years," said Iceland Foods CEO Malcolm Walker.

However, Walker said Valtysson was a temporary appointment and he did not know when a permanent chairman would be appointed.

Johannesson was accused of leading a "conspiracy" to siphon money from Glitnir Bank, of which he was the biggest investor, before its collapse in 2008. He has stepped down from his role at Iceland and his position on the House of Fraser board to concentrate on fighting the US lawsuit.

Johannesson was the founder of Baugur, which bought shares in UK companies such as Debenhams, Woolworths, House of Fraser, Hamleys, Karen Millen, Whistles and M&S, before falling into administration. Baugur led a buyout of Iceland Foods in 2005, returning it to private ownership and reinstating its founder, Walker, as CEO.

"We are sorry Jón Ásgeir has been obliged to step down to focus on defending himself against the recent lawsuit lodged against him in New York, and in the light of the related action taken to freeze his assets in the UK," said Walker. "We will always be grateful to him for everything he has done to make the amazing Iceland Foods recovery story possible, for the faith he placed in me and the rest of the returning senior management, and for his contribution to our board since 2005."

Johannesson said his resignation had been tendered "with regret in order to avoid any unwarranted damage being caused to these companies" while he defended himself against the claims.