Reasons behind Liquidation of Australian Entities: A Case Study

Advance financial accounting
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Introduction
The aims of the report is to find out the reasons behind
liquidation of some well known Australian entities like HIH
Insurance, Stella Homes and Aluminium Boats Australia.
The report will discuss about the APES 110 Code of Ethics
for Professional Accountants and will highlight 5 codes of
ethics. Further, it will focus on the issues related to
corporate governance that led to the collapse of above
mentioned entities and the liquidation type that was
called for each of the entities (Chan and Martek, 2017).

Company backgrounds
Aluminium Boats Australia –
It was established in the year 1999 and the main business of the
company was repairing and building boats. The company was
specialised in leisure craft and ferries and only used highest quality
of materials and the latest techniques for construction.
HIH Insurance –
HIH Insurance Limited that was an Australian public listed
company was the 2nd largest general insurance company in
Australia before its collapse during the year 2001. It used to cover
different segments for insurance such as private and public
liability, commercial and industrial insurance, property and
worker’s compensation insurance.
Stellar Homes –
It is the leading real estate development entity based in South
Florida that reshaped Miami-Dade, Palm Beach countries with the
stellar quality, environmentally friendly, modern designed and
healthy communities.

Reasons behind liquidation
Aluminium Boats Australia –
Aluminium Boats Australia Pty Ltd was placed in voluntary
administrator after it lost one of the navy vessels. The reason
behind the company’s collapse was the fire that destroyed the
HMAS Bundaberg in the month of August 2014.
HIH Insurance –
Deficit for assets over liabilities was estimated to be AUD 5
billion out of total balance sheet amount of AUD 7 billion.
Royal commission followed the entity for the period of more
than 18 months for recovering cost of more than AUD 50 million.
Stellar Homes –
Stiff competition is there for working under the sector for
residential construction. Basically the tough economic climate in
the location of South Australia for the builders was the main
reason for the competition.