Administrators for Australia’s largest specialty fashion group, Mosaic Brands, have issued a preliminary finding that the company may have been operating while insolvent, four years before the company’s collapse.
Mosaic Brands entered administration last year and owes a total of between $361 million to $392 million to creditors in Australia and overseas.
Insolvency is when a company can no longer pay its debts, and it is illegal to trade under these circumstances, according to the Corporations Act. There are serious penalties for allowing a company to trade while insolvent.
In the report dated 13 June, which was handed to creditors on Friday, FTI Consulting estimated that the potential liability for a successful insolvent trading claim in…
