ROME (MF-Dow Jones)--Creditor banks owed EUR492 million from struggling Mariella Burani Fashion Group (MBFG.MI) will meet Thursday to discuss ways for the clothing manufacturer to avoid bankruptcy, people with knowledge of the situation said Wednesday.

The meeting has been scheduled ahead of a hearing expected on Jan. 27 at which a judge will examine whether one of the holding companies controlling the firm must file for insolvency after it burned through all its shareholders' equity and accumulated overdue loans of around EUR20 million.

An insolvency filing by one of the holding companies could place the entire group at risk.

The clock is ticking for Mariella Burani's survival, since the complexity of the company's maze of holding companies makes it unlikely that creditors and shareholders can find an agreement before the court date next week, one of the people said.

The company has foundered recently after the controlling shareholder, the Burani family, failed to set up a EUR50 million escrow account as requested by its creditor banks, to be used to fund the company's planned capital increase, which is expected to be completed by Feb. 12.

-By Gabriele La Monica, with MF-Dow Jones, and Chiara Vasarri, Dow Jones Newswires; 39 06 6976 6923; chiara.vasarri@dowjones.com

(Sabrina Cohen in Milan contributed to this article)
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