Mosaic Companies: Baupost-Backed Luxury Tile Empire Crumbles in 129-Day Liquidation

Mosaic Companies, LLC, the tile and stone distributor backed by The Baupost Group, filed for chapter 11 bankruptcy on July 8, 2025, in Delaware with approximately $65 million in secured debt and a prepetition sale agreement already in hand. The company—formed in 2019 as a partnership between South Florida distributor Albert Claramonte and Seth Klarman's Boston-based investment firm—pursued a luxury surfaces roll-up through acquisitions, including Walker Zanger, founded in 1952, and South Florida's Opustone. Court filings cite supply chain disruptions, freight cost increases, rising interest rates, and a largest customer that did not share freight cost increases as contributors to liquidity pressure.

Artivo Surfaces, LLC, a Transom Capital portfolio company, completed its acquisition of the Walker Zanger and Anthology brands for $17.5 million plus assumed liabilities through a court-supervised sale process that closed 49 days after the petition date. A liquidating plan was confirmed 129 days after filing. The sale preserved approximately 200 jobs and the Walker Zanger brand identity, while more than 150 pending silica exposure lawsuits against Walker Zanger received no dedicated treatment in the plan as the buyer moved to enforce free-and-clear sale protections.

The Baupost Roll-Up: Building a Luxury Surfaces Platform

The Baupost Group L.L.C., a Boston-based hedge fund founded by value investor Seth Klarman, partnered with Albert Claramonte in 2019 to form Mosaic Companies. The strategy targeted consolidation in the luxury tile and stone distribution sector. Claramonte brought operational expertise from Surfaces Southeast, a family-owned mosaic and specialty wall tile distributor serving major national accounts including Floor & Decor and Lowe's Home Improvement. Baupost provided capital for the platform.

The partnership executed acquisitions in 2021 to assemble a luxury surfaces platform:

Walker Zanger, founded in 1952, is described as synonymous with timeless luxury and innovative materials in the architecture and design community. The acquisition brought 11 showrooms and stone slab galleries across major metropolitan markets, along with commercial relationships that extended beyond retail to hospitality and commercial design segments. Anthology provided a trend-forward complement, while Surfaces Southeast anchored commercial distribution to national home improvement retailers.

The combined platform operated with dual headquarters in Miami and Atlanta, serving both retail and wholesale customers. Mosaic provided integrated back-office functions including senior management, centralized cash management, and shared services across the operating subsidiaries. International operations extended to Mexico through Ceramica Antique S De RL de CV and to Spain through Surfaces Europe SL, providing sourcing optionality and access to European design trends.

The acquisitions closed as the post-pandemic supply chain crisis intensified.

Drivers of Distress

Court filings describe multiple macroeconomic pressures following the 2021 acquisitions. The First Day Declaration attributed distress to five factors during the 2021-2025 period.

Supply chain disruptions. Federal restrictions, port delays, and delivery logjams during 2021-2023 caused Mosaic's suppliers to fill only a fraction of orders. The company responded by over-ordering to secure product. When restrictions lifted, deliveries exceeded customer demand. The result was higher inventory carrying costs without corresponding revenue, with surplus product in warehouses. The mismatch between inventory investment and sell-through rates consumed working capital.

Freight cost increases. Container shipping costs reached historic highs during the supply chain crisis, with rates from Asia to the U.S. West Coast exceeding $20,000 per container at peak levels—more than ten times pre-pandemic norms. For a company importing stone and tile from global sources, the freight burden increased. Surfaces Southeast's largest customer, Lowe's Home Improvement, did not absorb these increased costs, forcing Mosaic to choose between maintaining the relationship at compressed margins or losing the revenue stream. The company absorbed the freight burden, reducing margins.

Interest rate increases. Mosaic carried floating-rate debt under its ABL and term loan facilities. As the Federal Reserve raised benchmark rates from near-zero to above 5%, the company's cost of funds increased. Beyond the direct interest expense impact, higher mortgage rates—exceeding 7% for 30-year conventional loans—dampened demand for new home construction and renovation, the primary end markets for luxury tile and stone. The dual pressure of higher borrowing costs and lower demand reduced liquidity.

Tariff impacts. Increased tariffs on imported goods, particularly from China, compressed the cost structure. For a company with global sourcing relationships and limited pricing power against national retailers, the tariff burden added margin pressure without offsetting revenue benefits.

Inventory overstock. The combination of supply chain dynamics resulted in ordering, paying for, and warehousing more inventory than could be sold. Carrying costs—including storage, insurance, and financing—drained cash without generating proportional revenue. By March 2025, the ABL facility had entered cash dominion, transferring control of daily cash management to the lender.

Prepetition Maneuvering: The $100 Million Home Depot Sale

Before chapter 11, Mosaic executed an asset sale to generate liquidity. On April 8, 2025, Construction Resources Company, LLC completed its acquisition of Opustone for approximately $100 million. Construction Resources, acquired by The Home Depot in December 2023, is a home products distributor and installer focusing on renovation, remodeling, and residential home building.

The Opustone transaction preserved the three South Florida showroom locations in Miami, Fort Lauderdale, and West Palm Beach, along with leadership and the operational team. Harris Williams advised Mosaic on the sale. The $100 million valuation was substantially higher than the subsequent Walker Zanger sale price.

The Opustone proceeds did not stabilize the remaining business. Within three months, Mosaic was negotiating a sale of its remaining assets and preparing for chapter 11.

Capital Structure at Filing

Mosaic entered bankruptcy with secured debt of approximately $65 million and listed assets of $10 to $50 million against liabilities of $100 to $500 million.

The term loan's current balance was $51 million against an initial principal of $117 million.

Section 363 Sale: Artivo Acquires Walker Zanger

The chapter 11 case followed a prepetition sale agreement. On May 23, 2025—more than six weeks before the petition date—Mosaic entered into an Asset Purchase Agreement with Artivo Surfaces, LLC, establishing a private sale with fiduciary out provisions that would allow the debtors to accept a superior offer.

The court entered the Sale Order within the 45-day deadline. No superior offers materialized during the marketing period.

Post-sale entity treatment. The buyer entity, Walker Zanger, LLC (formerly WZ Buyer, LLC), acquired the operating business free and clear of liens, claims, and encumbrances. The selling debtor entity was renamed WZ Oldco, LLC (formerly Walker & Zanger, LLC) for wind-down purposes, a standard structure to preserve the seller entity for claim administration while transferring operations to the purchaser.

Buyer Profile: Transom Capital and Artivo Surfaces.

Transom Capital is a Los Angeles-based, operationally focused private equity firm founded in 2008 that specializes in identifying and unlocking value in middle-market businesses. Artivo Surfaces, Transom's surfaces industry platform, serves as the parent company to Virginia Tile and the newly formed GalleherDuffy company. Following the Walker Zanger acquisition, Artivo's network spans 64 locations across more than 18 states.

Kirkland & Ellis served as legal advisor to Transom on the transaction. Both Walker Zanger and Anthology retained their distinct brand identities post-acquisition, operating as dedicated divisions within the Artivo structure rather than being merged into existing operations.

The Silica Mass Tort Complication

Beyond the financial restructuring, the Mosaic case includes mass tort litigation. Walker Zanger faces more than 150 lawsuits alleging that fabrication workers developed serious health conditions from exposure to silica, metals, toxins, and other hazardous substances contained in the company's stone products.

Silica Exposure Allegations.

Silicosis—a progressive, incurable lung disease caused by inhaling crystalline silica dust—has emerged as a significant occupational health concern in the stone fabrication industry. Workers who cut, grind, and polish engineered stone and natural stone slabs without adequate respiratory protection may inhale silica particles that accumulate in lung tissue, causing scarring and reduced lung capacity. In severe cases, silicosis progresses to respiratory failure or requires lung transplantation.

The lawsuits against Walker Zanger share common allegations:

• Failure to warn fabricators about silica exposure risks
• Negligent product distribution without adequate safety information
• Exposure leading to lung disease, silicosis, and other serious respiratory conditions

The allegations target the distribution chain rather than the stone manufacturers themselves, asserting that Walker Zanger and similar distributors bore responsibility for communicating hazards to downstream users.

Automatic Stay and Claims Treatment.

The chapter 11 filing automatically stayed all pending silica litigation under Bankruptcy Code section 362. This stay prevented claimants from prosecuting their cases while the bankruptcy proceeded, effectively freezing claims adjudication during the 129-day case.

Notably, the liquidating plan included no provisions specifically addressing silica-related claims:

• No trust was established to fund future silica claim payments
• No claims resolution process was proposed for tort claimants
• No dedicated treatment distinguished tort claims from general unsecured claims
• No channeling injunction directed future claims to a designated resolution mechanism

This outcome—contrasting sharply with mass tort bankruptcies that establish trusts and claims facilities for toxic exposure victims—leaves silica claimants as general unsecured creditors competing for limited remaining assets after secured claims and administrative expenses.

Post-Closing Enforcement.

On November 20, 2025, the buyer entity—Walker Zanger, LLC—filed a Motion to Enforce Sale Order, seeking court enforcement of the sale order's free-and-clear provisions against parties attempting to assert claims against the purchased assets. This motion, pending as of late December 2025, addresses the sale order protections conveyed to Artivo and the interests of silica claimants seeking recovery from the Walker Zanger business operations.

The enforcement motion seeks to define the scope of the sale order protections and the forum for silica-related claims.

Liquidating Plan Structure

The Mosaic case proceeded as a liquidating chapter 11. After the Walker Zanger sale closed, the remaining debtors had no ongoing business operations and existed solely to administer claims, distribute sale proceeds, and wind down.

Plan Development Timeline.

The plan underwent multiple amendments as parties negotiated treatment terms and addressed objections:

The Second Amended Joint Chapter 11 Plan of Liquidation provided for:

• Distribution of sale proceeds according to the Bankruptcy Code's priority scheme
• Wind-down of remaining assets and operations
• Resolution of filed claims and professional fee applications
• Rejection of executory contracts and unexpired leases
• Appointment of a plan administrator to oversee distributions

The Official Committee of Unsecured Creditors filed a Statement in Support of Confirmation on November 11, 2025, indicating that the committee concluded the plan represented the best available result under the circumstances.

Limited Objections.

Two parties filed limited objections to plan confirmation:

Element Fleet (Docket #405, October 28, 2025): Element Fleet, a vehicle fleet management company, objected regarding treatment of its vehicle lease contracts with the debtors. The objection was resolved through an assumption and assignment order entered December 18, 2025.

Chubb Companies (Docket #431, November 6, 2025): Chubb filed a limited objection addressing insurance-related plan provisions. The confirmation proceeded over the objection, suggesting either resolution or the court's determination that the objection did not impede confirmation.

Neither objection challenged the fundamental plan structure or the sale transaction, indicating broad creditor acceptance of the liquidating path.

DIP Financing and First Day Relief

The case was supported by a $15 million DIP facility provided by Truist Bank under the DIP Final Order, which enabled the debtors to fund the sale process, maintain operations through closing, and administer the wind-down.

First day relief followed a standard package for a liquidating debtor, with interim orders entered July 10, 2025:

Professional Retentions

The case included multiple debtor and committee professionals.

Debtor Professionals.

UCC Professionals.

The UCC retained Gilbert LLP as special insurance counsel.

Other Key Parties.

Industry Context: Tile Market Conditions

Mosaic's distress coincided with a weaker period for the U.S. tile industry in 2025. Tile consumption declined for the third consecutive year.

Contributing Factors.

High mortgage rates suppressed residential demand throughout 2025, with 30-year conventional rates remaining above 6.5% and dampening both new construction and renovation activity. Tariff volatility added uncertainty to import costs, while consumer confidence constrained discretionary spending on home improvements.

The residential market faced more pressure than commercial applications, where healthcare, education, and hospitality projects provided resilience. Entry-level commodity products saw more impact as consumers traded down or deferred purchases. Upper-end product lines still faced reduced demand.

Global Market Contrast.

Despite U.S. challenges, the global tile market remains on a growth trajectory. Market research projects global tile consumption to reach $587.72 billion by 2035, reflecting a 7.5% compound annual growth rate from a 2024 base of approximately $265 billion. Growth drivers include urbanization in emerging markets, infrastructure investment, and residential construction in Asia, Africa, and Latin America.

Key Timeline

Restructuring Implications

The Mosaic case includes several restructuring features that appear in distressed building products distributors and private equity-backed roll-ups.

Roll-up timing. The acquisitions closed in 2021, ahead of the 2021-2023 supply chain disruptions and 2023-2024 interest rate increases described in court filings.

Customer concentration exposure. Surfaces Southeast's largest customer, Lowe's Home Improvement, did not absorb increased freight costs during the supply chain crisis, compressing margins.

Mass tort claims. The 150+ silica lawsuits remained stayed during the case, with no dedicated trust or claims resolution process in the plan, and the buyer later filed a motion to enforce the sale order protections.

Prepetition sale execution. The May 2025 APA execution preceded the July 8, 2025 petition date, and the sale order was entered 43 days after filing, with confirmation 129 days after filing.

Frequently Asked Questions

What is Mosaic Companies and what products does it sell?

Mosaic Companies, LLC sold wall and mosaic tile, floor tile, and stone slab products to retail and wholesale customers. The company owned brands including Walker Zanger (founded 1952), Anthology, and Opustone, with dual headquarters in Miami and Atlanta. Mosaic was formed in 2019 as a partnership between Albert Claramonte and The Baupost Group L.L.C., the Boston hedge fund founded by investor Seth Klarman. The company operated 11 showrooms and stone slab galleries and served customers including Floor & Decor and Lowe's Home Improvement.

What caused the Mosaic Companies bankruptcy filing?

Multiple factors combined to drive the filing: pandemic-era supply chain disruptions that first caused order shortages and then inventory overstock when deliveries resumed; record container freight costs that largest customer Lowe's did not share, compressing margins; rising interest rates that increased borrowing costs under floating-rate debt facilities while dampening demand for luxury home finishings; and increased tariffs on imported goods. The ABL facility entered cash dominion in March 2025, signaling lender control.

What was the outcome of the Mosaic Companies restructuring?

Artivo Surfaces, LLC, a Transom Capital portfolio company, acquired the Walker Zanger and Anthology brands for $17.5 million plus assumed liabilities through a court-supervised sale that closed August 26, 2025. A liquidating plan was confirmed November 14, 2025, to wind down remaining assets and distribute proceeds to creditors. Separately, Opustone was sold to Construction Resources, a Home Depot subsidiary, for approximately $100 million before the bankruptcy filing.

What happened to the silica lawsuits against Walker Zanger?

Walker Zanger faced more than 150 lawsuits alleging fabrication workers developed silicosis and other lung diseases from silica exposure in stone products. The chapter 11 filing automatically stayed all litigation. Notably, no trust, claims resolution process, or dedicated treatment for tort claimants was included in the liquidating plan. The buyer filed a Motion to Enforce Sale Order seeking to protect against parties asserting claims post-closing, indicating ongoing tension over successor liability.

Who are The Baupost Group and what was their involvement?

The Baupost Group L.L.C. is a Boston-based hedge fund founded by value investor Seth Klarman, managing approximately $30 billion in assets. Baupost partnered with Albert Claramonte in 2019 to form Mosaic Companies and fund the acquisition strategy targeting consolidation in luxury tile and stone distribution. Baupost served as the equity sponsor throughout the restructuring, with Willkie Farr & Gallagher LLP representing the fund in the chapter 11 case.

Who is Artivo Surfaces and what is their strategy?

Artivo Surfaces is a platform company backed by Transom Capital, a Los Angeles-based operationally focused private equity firm founded in 2008. Artivo serves as the parent company to Virginia Tile and GalleherDuffy, operating across 64 locations in more than 18 states. The company will operate Walker Zanger and Anthology as dedicated divisions while maintaining distinct brand identities.

What happened to Opustone?

Opustone, a South Florida slab and tile distributor with showrooms in Miami, Fort Lauderdale, and West Palm Beach, was sold to Construction Resources Company, LLC (a Home Depot subsidiary) for approximately $100 million on April 8, 2025—before the bankruptcy filing. The Opustone leadership team and employees remained with the business, and the three showroom locations continue operating. The Opustone acquisition was excluded from the Artivo transaction.

How quickly did the Mosaic bankruptcy case proceed?

The case timeline: chapter 11 petitions were filed July 8, 2025; the sale order was entered August 20, 2025 (43 days); Artivo's acquisition closed August 26, 2025; and the liquidating plan was confirmed November 14, 2025 (129 days from filing). The prepetition stalking horse APA executed in May 2025 preceded the expedited sale timeline.

What is the current state of the U.S. tile industry?

The U.S. ceramic tile market has contracted for three consecutive years, with 2025 consumption projected at approximately 2.67 billion square feet—the lowest level since 2014. High mortgage rates, tariff volatility, and declining consumer confidence have suppressed demand, particularly in residential markets. Entry-level commodity products have experienced the most significant negative impact, while upper-end product lines have faced reduced demand.

Who were the key professionals in the Mosaic bankruptcy case?

Morris, Nichols, Arsht & Tunnell LLP and Milbank LLP served as debtor counsel, with Berkeley Research Group, LLC as financial advisor and Epiq Corporate Restructuring as claims agent. Robinson & Cole LLP and Caplin & Drysdale, Chartered advised the Official Committee of Unsecured Creditors, with Gilbert LLP serving as special insurance counsel. Kirkland & Ellis LLP represented buyer Artivo Surfaces, and Willkie Farr & Gallagher LLP represented equity sponsor The Baupost Group.

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