Former retail giant Mosaic Brands goes into liquidation
Creditors have voted to liquidate the former owner of iconic retail chains including Rivers, Millers and Noni B amid investigations it traded insolvent before the $367m collapse.
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Creditors have voted to liquidate the former owner of iconic retail brands Rivers, Millers and Noni B, after it collapsed owing about a third of a billion dollars.
Retail company Mosaic Brands claimed to be Australia’s largest specialty fashion retailer, with about 1,000 stores under brands including Millers, Noni B, Rivers, Katies, Crossroads, Rockmans, W. Lane and Autograph.
The ASX-listed company was placed in voluntary administration in October last year, owing up to $367.2 million according to documents lodged with ASIC.
The largest bundle of debts, estimated at $194.5 million, were owed to inventory suppliers.
Millions were also owed to landlords, employees, customers and other service suppliers, like freight, utility and IT providers.
Creditors voted to place Mosaic Brands into liquidation on Monday, after there was no offer of a deal in the form of a deed of company arrangement.
Administrators Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath from FTI Consulting have assumed the roles of liquidators.
They will continue their investigations into potential issues flagged in their administrators’ report last month, including that Mosaic Brands may have traded while insolvent from December 2020.
The report noted further investigations would be needed to determine whether all of the directors met the criteria at all times for the Safe Harbour defence, a legal protection from personal liability for insolvent trading, if the company was undertaking a restructure.
If the directors were unable to qualify for the Safe Harbour provisions, they could be ordered to compensate the company for debts incurred when trading while insolvent.
The report also said under a liquidation, there would be further investigations into whether Mosaic Brands’ $11 million acquisition of women’s fashion retailer EziBuy in 2022 was a potentially uncommercial transaction.
All remaining operations and stores have stopped trading and all assets have been sold, a statement from FTI said.
The Millers, Noni B, Katies and Rockmans brands were sold to clothing wholesaler Caroline K Morgan in April, while Rivers was also sold to a separate buyer.
Meanwhile Noni B’s operations in New Zealand have ceased.
The ACCC launched legal proceedings in March last year, alleging Mosaic Brands breached consumer law by failing to deliver hundreds of thousands of products to customers within the delivery timeframes advertised on its websites during September 2021 and March 2022.
Mosaic Brands filed defences before it went into administration.
The administrators consented to the proceedings continuing in late January.
The matter is next listed to be heard in the Federal Court in three weeks.
News Corp has contacted directors David Wilshire, Richard Facioni and Quentin Gracanin for comment.
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Originally published as Former retail giant Mosaic Brands goes into liquidation
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