ROME:Debt-ridden Italian fashion house Mariella Burani said Saturday it would seek bankruptcy protection after failing to raise funds to cover losses.

With a debt of nearly 500 million euros (680 million dollars), the company decided to begin bankruptcy proceedings with the intention of 'continuing business activities,' it said in a statement after an extraordinary board meeting.

Burani had 'no evidence of a binding commitment from partners or third parties' to raise the funds necessary for a restructuring, the statement said.

MBFG, a purveyor of 'accessible luxury,' whose labels include Mandarina Duck and Coccinelle, recorded a loss of 185 million euros in the first nine months of 2009.

The decision came after a Milan court on Thursday declared bankrupt the Burani Designer Holding (BDH), which indirectly controls Mariella Burani Fashion Group (MBFG).

'After months of fruitless negotiations... the minimum conditions for a rescue' of the group overall are no longer present, the court said.

Milan prosecutors are investigating Walter Burani for currency speculation, false accounting and tax fraud.