Insolvency occurs when a company is unable to repay its debts, and trading in this state is illegal, as outlined by the Corporations Act. There are significant penalties for trading while insolvent.

According to the report, Mosaic Brands’ directors were all approached and asked how much money they personally have, and all refused to answer.

What are safe harbour protections, and how do they work?

If established, these protections could amount to a defence against any potential director liability for trading whilst insolvent.

Landmark case

FTI Consulting stated in their report to creditors that it is uncertain if the directors of Mosaic Brands consistently met the necessary criteria, prompting a need for further examination.

More than 650 stores closed, thousands of jobs lost

Evans and Softa resigned in April 2024 and June 2024 respectively, four months before the company entered administration.

Rivers announced earlier this year that it would close all its remaining Australian stores. Source: AAP / Julian Smith

The current CEO, Erica Berchtold, was appointed in April 2024.

Further details will be revealed in Dateline’s two-part investigation into the fall of Mosaic Brands, entitled ‘The Cost of Doing Business’, which will soon be available on SBS TV and SBS On Demand.