By  on February 4, 2010

MILAN — In a second hearing here, Milan prosecutors Luigi Orsi and Mauro Clerici on Wednesday reiterated Burani Designer Holding N.V. should be declared bankrupt.

According to a well-placed legal source, prosecutors also stated BDH owes 20 million euros, or $27.8 million at current exchange, to three private equity funds, which assisted the group in its tender offer of 15 percent of Mariella Burani Fashion Group at the end of 2008. ABS Wealth Management, IGI SGR and JH Partners, which controls innerwear brand La Perla, are understood to be the three creditors.

The prosecutors believe BDH does not have funds to repay this debt, nor another debt of 5 million euros, or $6.9 million, with MBFG, and one of 15 million euros, or $20.9 million, with a pool of banks.

According to the defense, however, the group is negotiating with creditors, although the source said prosecutors believeBDH “has been in discussion with minor creditors only, and not with the banks.”

A Milan judge now will have to decide if the company can be declared bankrupt in the city of Milan, because the prosecutors contend that, although BDH is based in Amsterdam, its offices are located here. During the hearing, the defense stated BDH was “telephonically managed” by Mariella Burani’s Reggio Emilia, Italy, headquarters and is asking for the proceedings to be transferred to that town.

Last month, Orsi and Clerici filed a bankruptcy request for BDH. The holding controls Mariella Burani Fashion Group, which produces Vivienne Westwood’s Anglomania line, John Galliano’s jewelry, Giambattista Valli and La Perla, among others. 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. Four companies under the Burani group are listed: Mariella Burani, Antichi Pellettieri, Greenvision Ambiente and BioEra.

The total debt of the four listed companies is 633.1 million euros, or $882.2 million.

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