Tis the season to be merry, except if you’re a director at clothing retailer Mosaic Brands.
The clothing group, which went into administration in late October with debts of at least $249 million, apparently did not have directors and officers insurance, according to two sources who could not be identified for confidentiality reasons.
It is highly unusual for a publicly listed company to not pay for such insurance, which exists to protect directors and management against the peril of being sued if they are found to have failed in their duties and responsibilities.
Mosaic Brands owns Rivers, Katies, Noni B and Rockmans.
Mosaic, behind brands such as Katies, Noni B, Millers and Rivers, continues to trade while in administration. It owes money to its shopping centre landlords, among them Scentre and Vicinity, almost 3000 staff, hundreds of suppliers and its lenders.
FTI Consulting, which is managing the administration of Mosaic, is also running the sale process of the group, which is also unusual. KPMG, which was appointed the receiver and manager to Mosaic, would typically run the sale process, but it and the secured lender, HilCo, have asked FTI to do that.
Meanwhile, KPMG is operating Mosaic, which has 700 stores. It has the unenviable task of trying to manage the retailer’s furious supplier network. Mosaic’s suppliers are being asked to continue to supply the retailer with clothing and footwear, through its busiest........