Reference no: EM132385484

Implement an Insolvency Program FNSACC611

ACCT5391C RMIT University

Assignment Brief:

You are required to do the tasks expected of a trustee in bankruptcy for an average individual addressing client's needs and the statutory requirements.

This assessment will address the student's competency to:

(i) Evaluate options for insolvency
(ii) Establish timelines & objectives
(iii) Monitor progress

Implement an Insolvency Program

Assessment Case study 2

Case Study Part 2

The Story of a Crashing Hobby.

We shall call the insolvent company "Crashing Hobby".

You may view the 6 videos going under the title above. Once you have watched the videos, you are to review the powerpoints etc and answer the following questions:

The word limit (maximum) is 1,100

1. Who obtained the Supreme Court order (presumably in 2019)?

2. List the probable events with all dates (being plausible), that led up to the creditor's application, starting with how the debt was incurred in the first place.

3. Is it a voluntary or compulsory winding up and why? In answering this question distinguish between these two concepts.

4. Who are the liquidators of "Crashing Hobby"? What could be their qualifications. Distinguish between the concepts of registered and unregistered.Also distinguish between official liquidator or not official liquidator.

5. Are the purchases of the airplanes, the "non-business related" transfers, and payments to the director's wife allowed under the Corp Act? Explain with reference to the legislation.

6. The voidable transactions provisions can be used against whom? Explain what this concept means with reference to the relevant provisions of the Corporations Act.

7. One of the reasons for having a liquidator is to establish the reasons for the company's failure (insolvency). List five (5) reasons why "Crashing Hobby" became insolvent.

8. Explain how a liquidator is able to pursue a claim on a deceased director through his executor of the deceased estate?

9. Forensic accounting utilizes accounting, auditing and investigative skills to analyze a company's financial statements (reports) for possible fraud in conjunction with anticipated legal action. Explain how forensic accounting was used to carry out the investigation of "Crashing Hobby"? Hint: look at the times they were before the court.

NOTES:
1. You should visit their website to discover their standing in the insolvency community.

2. You may wish to explore these websites:
Google: My life in crime: Chronicles of a forensic accountant
Google: Forensic accounting cases& examples- Swenson Forensic Accounting
Google: Forensic accounting cases- How Forensic Accounting Works/ Howstuffworks-science

Task instructions

You are required to complete this assignment, which is like a case study. It is essential that you pass it, to be competent in this subject as a whole.

You need to view the material surrounding Crashing Hobby's liquidation/insolvency, including all relevant sections of the Corporations Act.

You need to do some research into the issue of forensic accounting, and into the issue of voidable transactions eg. Unfair preferences.

You need to write in clear concise English, properly constructed sentences; with proper punctuation and spelling.

Conditions for assessment

You need to access the Corporations Act.

You need the current levels of penalties for failure to fulfil director's duties and any other provisions in legislation that affects the company and its liquidator.

You need to use things like the notes provided in the powerpoints.

1,100 words maximum