Accounting Financial ACC70 Assignment
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Added on 2020-02-24
Accounting Financial ACC70 Assignment
Added on 2020-02-24
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Accounting Financial ACC70 1ACCOUNTING FINANCIAL ACC70Student’s NameCourseLecturerInstitutionDate
Accounting Financial ACC70 2Accounting Financial ACC70IntroductionIn the recent past, several Australian organisations were declared bankrupt due to failure to meet their liabilities. Some of these companies include ABC Learning, One.Tel and HIH.With these considerations, this paper aims to investigate on the major events that led to their liquidation. The paper also aims to present analysis on whether liabilities have been the majorcontributor to the companies’ liquidation.Background of the Three Companies The ABC learning was one of the Australian organizations. It was established in 1988 in Ashgrove, Queensland and rapidly expanded its operations reaching around 43 childcare centres by the end of June 2001 (Rush & Downie, 2006). The company was listed in Australian Security Exchange in 2006 with a market capitalization of around $2.5 billion. It went into administrative receivership after the upshot from subprime mortgage crisis resulted to debt repayment overwhelming the frim (Kruger 2011). In 2005, the company purchases Learning Care Group which provided it with over 70,000 extra licensed childcare places. The main role of ABC Learning was operation of childcare centers. In essence, it provided childcare services for different children from six weeks old to the pre-school age. It main objective was to make sure that every kid is loved, educated and nurtured and therefore ensure they are given the best probable chance in their life. After a successful history of this company back in 2008, the company had its backdrop of severe financial and debt crisis that forced it to go into a voluntary administration receivership as on November 2008. Over this period, 40% of its centers were declared unprofitable and its board handed ABC over to the administrator (Rush & Downie, 2006). On the other hand, HIH Insurance comprises of numerous distinct government-licensed insurance organisations, including the HIH Casualty as well as the General Insurance
Accounting Financial ACC70 3Limited, CIC Insurance Limited as well as the World Marine and General Insurance Limited. In essence, HIH Insurance Company was the Australian largest Insurance firm prior to it liquidation on March 2001 (Buchanan, Arnold & Nail 2003). Its liquidation is the largest collapse in the history of the country with it losses being estimated at $5.3 billion. HIH Insurance was established in 1968 by Michael and Ray before it was acquired by British Company CE in 1971 and then transferred to Health International Holdings in the year 1989 (Allan 2006). Furthermore, One.Tel Phone Company was the fourth largest company in the telecommunication sector in Australia before its collapse. The company encompassed a groupof the Australian telecommunication firms established in 1995 most of which are under external administration by the court after liquidation. The firm was established by Brad and Jodee. The two has ventured in unsalable and obsolete software. In addition, the two were properly connected in contact with investors, brilliant personnel and financiers who could assist their firm grow. One-Tel developed at a significant rate and achieved great deals withina short period of time. During its existence, OneTel Phone Company occupied the second position in the Australian telecommunication organization (Avison & Wilson 2002). It had over 2 million consumers and its operations were in eight major countries. Therefore, the collapse of this firm was a shock to the different corporates operating in Australia and across the globe. This firm had high profile or reputable directors and was known for its effective promotion. Nonetheless, the firm was declared bankrupt in June 2001 and since that time it has been in the process of being settled (HIH Royal.Com 2003). ABC Learning CollapseIn spite of this company selling off assets, it fell into receivership in 2008.Its collapse is not just a commercial let-down but it is also a governmental policy disaster. In essence, the
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