(Australian) adj: Signifies that something is dead or somehow defunct. Is often used with reference to businesses that go bankrupt or otherwise come to grief.
Should not be confused with the phrase 'the arse fell out of' (e.g. 'We used to be a banana republic until the arse fell out of the bananas market').
The former CEO has told the HIH Royal Commission that he gave away $14.4 million to friends and colleagues in the months before the insurance giant went arse-up.
It's not my fault your business went arse-up mate!