Collapsed retail business Mosaic Brands has been embroiled in three court cases this year, with one of these against the liquidators overseeing its collapse, brought on by a creditor.
This is confirmed through documents circulated to Mosaic's creditors by FTI Consulting, the liquidating firm, obtained by Ragtrader. FTI's Kathryn Evans, David McGrath, Kate Warwick and Vaughan Strawbridge are managing the liquidation process.
Mosaic Brands is the former owner of several retail businesses, including Noni B, Millers, Katies and Rivers. The company entered voluntary administration in October last year, with all retail brands closing down, along with hundreds of stores.
One Federal Court of Australia proceeding was brought against Mosaic by the Australian Competition and Consumer Commission (ACCC). It came to a head last month on August 28, with the court handing Mosaic Brands $25.05 million in penalties for consumer law breaches that included accepting payment but failing to deliver items to consumers within a reasonable time.
FTI Consulting has since confirmed that Mosaic is unable to pay the $25 million in penalties, telling creditors that the fashion business has no funds due to its liquidation process. First ranking-creditors in the liquidation process are expected to get 98 cents on the dollar, with second ranking creditors likely getting low or no return.
FTI also noted that penalties and fines are generally unable to be claimed against an insolvent company when it is in liquidation under section 553B of the Corporations Act 2001.
Other circulated documents obtained by Ragtrader also confirm that the liquidators themselves are facing a Federal Court case tabled by one of Mosaic’s creditors – a clothing manufacturer in China. The Chinese manufacturer is seeking to remove the FTI liquidators overseeing Mosaic and replace them with new ones at Wexted Advisors.
FTI told creditors that it strongly disputes the basis on which the court application has been commenced, noting it will "vigorously oppose” the action.
The latest hearings took place on August 25 and 26, but liquidators noted they cannot confirm when the outcome of this court case will be known and will advise creditors when it arises.
No new court date has been listed as yet.
Amid these court appearances is another that was done to determine Mosaic Brands as the true employer of its staff. All employees that were employed across Mosaic Brands’ subsidiaries were listed as employees under Noni B Holdings Pty Ltd. The Supreme Court of New South Wales determined in the end that Mosaic is the employer of all staff under the group.
According to the Receivers who oversaw the management of Mosaic during its voluntary administration phase, total employee entitlements were estimated to be around $21.2 million. A substantial amount has already been paid by the Commonwealth under the Fair Entitlements Guarantee Scheme (FEG). Receivers shared this during the court hearing over Mosaic Brands’ true employer status.
The Receivers added that not all of the employees will be eligible to access the FEG scheme to pay their entitlements in full or at all.
On top of this, the Receivers confirmed that they managed to accrue around $205 million in total net sales of inventory during Mosaic’s receivership period, between October 2024 to April 2025.
A second report for creditors by FTI Consulting, released on June 13, reported that Mosaic Brands’ total estimated liabilities – including employee claims – totalled $385.97 million. This includes $334.21 million owed to general unsecured creditors, with $22.28 million owed to second-ranking secured creditors and around $750,000 to first-ranking secured creditors.
It also includes liabilities owed to Noni B Holdings NZ’s unsecured creditors of $25.97 million.