CORRECTED - UPDATE 2-German retailer Hertie files for insolvency

(Corrects in 13th paragraph that Dawnay Day Treveria no longer partly owned by Dawnay Day Group affiliates)

(Adds comments from Dawnay Day Treveria)

DUESSELDORF, Germany, July 31 (Reuters) - German department store chain Hertie has filed for insolvency after efforts to restructure its finances or raise fresh funds failed, the retailer said on Thursday.

Hertie, which has 72 stores and employs more than 4,000 staff, said it aimed to keep operating while it finds a way to turn around the business.

"The joint goal of management and staff is to continue business without interruption in the interests of staff, customers and creditors," Managing Director Erik van Heuven said in a statement.

British private investment group Dawnay Day Group has a majority stake in Hertie. It bought 74 branches in 2005 from KarstadtQuelle, which is now known as Arcandor (AROG.DE).

"It is well known that the situation at the investor Dawnay Day is also tense," Hertie said in its statement.

Dawnay Day had no immediate comment.

Arcandor said it would feel no financial impact from the insolvency filing.

Hertie's financial troubles have already contributed to the default last week of a loan tied to hundreds of millions of euros of commercial mortgage backed securities (CMBS).

"As far as we know, it is Europe's single-largest payment default on a CMBS loan. There have been other loans that have been in default of their loan-to-value covenants, but this is the largest of its particular kind," said Hans Vrensen, head of securitisation research at Barclays Capital, who warned of the perils of the loan in a note last Friday.

Ratings agency Fitch also put seven classes of CMBS secured on cashflow generated by the department store chain on "ratings watch negative" on Tuesday, highlighting its fears "that the poor operating performance of Hertie as tenant in the portfolio may lead to further under-performance of the loan".

It also said it was concerned by press statements which suggested Dawnay Day, a member in the joint venture backing Hertie, had undertaken sales of assets unrelated to this portfolio to bolster its general financial position.

The bonds under scrutiny ranged in rating quality from "AA" to "BB". Fitch affirmed some 487 million euros of bonds rated "AAA".

Separately, Dawnay Day Treveria, a Germany-focused retail property investment firm that until Monday was partly owned by affiliates of the Dawnay Day Group, said it depended on Hertie for 2.2 percent of its annual rental income.

The company, which makes 3.6 million euros a year by letting five of its 450-strong portfolio of properties to Hertie, said it was discussing options which would allow the German retailer to continue trading and paying rent.

(Reporting by Anneli Palmen, additional reporting by Sinead Cruise and Myles Neligan in London, writing by Michael Shields; editing by Sue Thomas and Andy Bruce) (michael.shields@thomsonreuters.com, Reuters Messaging: michael.shields.reuters.com@reuters.net; +49 69 7565 1266))