HIH provisional liquidator Tony McGrath wants to put the company’s Australian operations into liquidation, but foreign considerations are delaying the liquidation process.

Reporting to the NSW Supreme Court yesterday, Mr McGrath said each of the major insurance licence-holding companies is insolvent and unable to pay its debts in full.

“Until the provisional liquidators have formed a more reliable view of the financial position of each HIH company, it is difficult for us to consider whether a scheme or schemes of arrangement may be in the interests of creditors.”

He told the court that if the position in Australia could have been considered in isolation from the international situation, “then it is likely that we would have recommended or be now recommending that each of the HIH companies be wound up”.

But because HIH has extensive assets in the US and Britain, the investigations into the collapse and the value of the foreign assets still have to be determined.

Mr McGrath said he has been granted a temporary restraining order in the US to prevent a “piecemeal grab” of assets by US creditors.

He will report back to the NSW Supreme Court on July 2.