By  on January 12, 2010

MILAN — The difficult economy and an acquisition spree based on debt have pushed Italian fashion company Mariella Burani Fashion Group into a corner.

On Monday, Milan prosecutors Luigi Orsi e Mauro Clerici filed a bankruptcy request for Burani Designer Holding NV, which controls Mariella Burani Fashion Group. Burani Designer Holding is based in Amsterdam, but its offices are located in Milan, allowing Italian prosecutors to pursue the group. A well-placed legal source said prosecutors proceeded because Burani Designer Holding is not able to pay a debt of 20 million euros, or $28.8 million at current exchange. According to the prosecutors, BDH owes 5 million euros, or $7.2 million, to MBFG, and 15 million euros, or $21.6 million, to a pool of banks. In Italy, bankruptcy can be pursued by prosecutors, creditors or the troubled company itself.

“Creditors have unsuccessfully been asking the Burani family, which controls BDH, to find fresh financing,” said the source. MBFG was first listed on the Milan Stock Exchange in July 2000. About 20 percent of its shares are held by investors, but trading was suspended in September. The future now depends on the Buranis’ next move, said the source. Four companies under the Burani group are listed: Mariella Burani, Antichi Pellettieri, Greenvision Ambiente and Bioera.

MBFG chairman Walter Burani said Monday that no request for bankruptcy proceedings had arrived at BDH. The total debt of the four listed companies is 633.1 million euros, or $912.1 million, he said. The debt at Mariella Burani stands at 492.6 million euros, or $709.6 million, including the debt of accessories company Antichi Pellettieri, whose own debt totals 140. 2 million euros, or $201.9 million.

As reported last week, the group’s financial adviser, Mediobanca Banca di Credito Finanziario SpA, failed to renegotiate MBFG’s debt with more than 40 banks, and quit at the beginning of the year. MBFG’s board over the weekend mandatedWalter Burani and chief executive officer Gabriele Fontanesi to select a new adviser.

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