The bankruptcy court of Reggio Emilia decided on June 4 to put Mariella Burani Fashion Group (MFBG) into liquidation on the grounds that time has run out to save or sell the company.
In 2010, the court put the insolvent group into extraordinary administration, the equivalent the U.S Chapter 11 procedure, to avoid liquidation. Three administrators, Francesco Ruscigno, Rossella Strippoli and Carmela Silvestri, were appointed to seek to relaunch the company or sell it in one block or piecemeal.
The court explained that despite having obtained a delay the administrators have been unable to sell the company. It added that the outcome of current talks with a potential unnamed acquirer does not indicate that a deal is imminent. At the end of April, the administrators obtained a stay of execution of the liquidation procedure until June 10. A few days ago, Ruscigno announced that the administrators were in talks with an Italian businessman who was considering making a binding offer.
According to the court, the potential buyer still has to assess the value of the brand and other assets. The court has appointed three liquidators – Franco Cadoppi, Maria Domenica Costetti and Giovanni Crotti – but for a temporary period, which could give leeway to a review of the decision. The administrators, and possibly the trade unions, are expected to appeal the ruling. In the meantime, MBFG employees started staging demonstrations against the liquidation procedure.