iNO is harbouring a Lake Eyre of skepticism in respect of recent instances where updated DIRRIs have been lodged by liquidators shortly after they’ve been served with proceedings seeking their removal.
On July 23 ASIC received an updated DIRRI from Vaughan Strawbridge, who’s lead appointee on the Mosaic Brands Limited (MBL) liquidation.
Along with colleagues Kate Warwick, Kathryn Evans and David McGrath, Strawbridge was appointed as a voluntary administrator (VA) of MBL on October 28 last year.
At the reconvened second meeting on July 1 the creditors, who’d been told a week earlier that the group should be placed into liquidation, were asked to vote on a resolution proposing the appointment as liquidators of Andrew McCabe, Jessie Wang, and Joe Hayes of Wexted Advisors.
The resolution was proposed by MBL creditor Shaoxing Newtex Imp & Exp Co Ltd (Shaoxing) which believes the FTI Consulting appointees, and in particular Strawbridge, have an incurable conflict in respect of Mosaic’s legal advisors Hamilton Locke and Strawbridge’s old firm Deloitte.
The two firms had been retained long before the appointment of the administrators and one of them was likely the supplier to MBL’s board of the safe harbour advice the group’s directors confessed to obtaining in a statement to the ASX in 2024. As is well known, Strawbridge was a senior partner at Deloitte until he defected to FTI in 2020.
Less well known is Strawbridge’s involvement attending MBL board meetings in 2020 and the retaining of Deloitte by Hamilton Locke in that year in respect of various advices to the MBL board and management including regarding “Project Roman” in respect of job keeper funds MBL received from the Federal Government.
Strawbridge was identified as “review partner” on the reports Deloitte prepared in respect of its retainers in 2020 but he told the July 1 meeting he did not provide any advice apart from in respect of Project Roman.
The alleged conflicts, outlined in an 18 page letter sent to the administrators by Shaoxing’s lawyers on June 18, were rebutted at the meeting by Strawbridge through his lawyer.
“That correspondence raised a series of assertions including about the Administrators’ alleged lack of independence,” KingWood Mallesons’ (KWM) Tim Klineberg told the meeting.
“The assertions lacked a proper basis and were based on a series of misconceptions. KWM have (sic) corrected those misconceptions in detailed correspondence sent to ERA Legal (Shaoxing’s lawyers) on 20 June 2025. ERA Legal was provided with an opportunity to withdraw their assertions but has not done so.”
Warning creditors that the allegations were potentially defamatory Klineberg encouraged them before voting on the replacement resolution to “consider the information the Administrators have provided in the properly reviewed and vetted disclosures that were made to creditors in the Administrators’ DIRRI”.
After further discussion the resolution to appoint the Wexted trio as liquidators was put to creditors and defeated.
Less than a week later Shaoxing’s application to have the liquidators removed and the Wexted trio appointed was filed in the Federal Court.
Two weeks after that Strawbridge and his co-appointees lodged an updated DIRRI. So much for “properly reviewed and vetted disclosures”.
The replacement document indicates that Strawbridge took a call from Hamilton Locke partner Nick Edwards in June 2024 to discuss whether FTI could provide assistance to MBL following its “market results announcement”. The initial DIRRI identified the first approach from Edwards as coming in August of 2024.
There was also fresh disclosures in respect of meetings FTI had with members of Deloitte’s MBL advisory team to take FTI “through the short term cashflow forecast they (Deloitte) had prepared for the Group”.
Clearly Strawbridge and his fellow appointees are taking no chances ahead of the hearing of the replacement application later this month because the updated DIRRI hardly reveals its predecessor to be manifestly deficient in its disclosures.
Perhaps filing a replacement DIRRI is just something lawyers advise any appointee to do once a replacement application is commenced?
Certainly the same could be said for Daniel Soire, who lodged a replacement DIRRI on July 17, 10 days after proceedings seeking to replace him as liquidator of Technology Solutions Experts Pty Ltd (TSE) were commenced in the Federal Court.
The updated document is scarcely different from its predecessor, with the only fresh information being the revelation that Soire’s referrer, who’s the sole director’s husband, paid $412 to discharge credit card charges. The newer of the two DIRRIs also contains a more detailed breakdown of how the initial $27,500 indemnity is being spent.
There’s nothing particularly controversial about the new information in either Strawbridge’s or Soire’s replacement DIRRIs and we have to wonder if there’d be any additional disclosures at all if it weren’t for the additional scrutiny the impending replacement applications will bring.
Further reading:
Mosaic liquidators counter punch hostile creditor
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