Andrew McCabe.
The Special Purpose Liquidators (SPLs) of the Mosaic Brands Group (Mosaic) are closing in on the failed retailer’s board, obtaining court approval to enter into new funding and retainer agreements that will see Mosaic’s directors and their advisors summonsed for public examination.
In the Federal Court yesterday Justice Ian Jackman approved an application by Andrew McCabe, Jessie Wang and Joe Hayes to enter into a funding deed with Neil Cussen’s Clover Risk Funding Pty Ltd and a retainer agreement with ERA Lawyers.
The amount being invested by Clover Risk was subject to confidentiality orders but it follows $300,000 Cussen made available to the Wexted Advisors trio last year when Mosaic creditor Shaoxing Newtex Imp & Exp Co Ltd (Shaoxing) applied to replace Mosaic Group’s general purpose liquidators (GPLs).
Whilst Shaoxing didn’t get what it really wanted – the removal of FTI Consulting’s Vaughan Strawbridge and his colleagues as administrators of Mosaic Group and a finding that Strawbridge potentially misled creditors at the second meeting – the issues of conflict raised in the removal and replacement proceedings were sufficient to persuade Federal Court judge Cameron Moore to order that the Wexted trio be appointed as SPLs to investigate potential claims against Mosaic’s directors.
“I do not consider it to be appropriate for Mr Strawbridge to continue to have the conduct of the potential claims against the directors,” Justice Moore said in his December 1, 2025 judgment.
Or for that matter certain claims against Deloitte and the directors’ legal advisors Hamilton Locke.
With the SPLs now having new funding confirmed one wonders what actions Strawbridge and his FTI colleagues Kate Warwick, Kathryn Evans and David McGrath have left to pursue, and how they might utilise the $10 million in litigation funding they arranged prior to being relegated to the GPL minor league?
The SPLs certainly have specific outcomes in mind. Directors duties breaches. Insolvent trading.
Mosaic’s problems were in part due to the COVID-era enforced lockdowns which starved the retailer’s already anorexic margins.
Whether the government-decreed moratoriums on insolvent trading and the periods the board spent in Safe Harbour will constitute defences sufficient to repel the SPL’s attack remains to be seen, and judges will be as interested as anyone in the concluding interpretations.
As well as obtaining court approval for the issue of summonses for examination McCabe, Wang and Hayes also obtained authority to issue notices to produce.
Fights over claims for legal professional privilege can’t be far.
Further reading:
Strawbridge’s Mosaic conflict requires SPL cure
Replacement bid a “material delay” for Mosaic
Strawbridge under the microscope over Mosaic
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