Princess cosmetics Ltd (PC) is a cosmetic manufacturing and selling company in Melbourne, Australia. The company has three directors, Princey, Queenie and Kingston. Princey is the managing director. Queenie is knowledgeable about cosmetics and is actively involved in researching and developing new products. Kingston is a non- executive director and was appointed as a director due to connections in the business and financial sectors.

PC was doing well for five years. However, six months ago a new competitor, 'Capital Cosmetics' (CC), emerged in the market. Within six months, CC has captured the market and PC has lost many of its customers. Currently, PC is having issues with new product development, attracting new customers and the loyalty of the existing customers.

Princey calls for a board meeting and tells Queenie and Kingston, in order to overcome the current issues, they have to open a new store in Chadstone shopping centre, which she claims is also the planned next step by their competitor. She, therefore, says they must hurry and pay the deposit for the only available store on the second floor where many other stores for popular brands for clothing and shoes are located. She promises the sales will pick up when they open a new store there. She does not reveal that she has not done a proper feasibility study. She also suggests to fund the opening of the new store, Kingston bring in, Lucas, his friend as a new investor. Kingston is doubtful about the whole plan and says he will think about it. Queenie however, agrees to the proposal.

Kingston says one of the reasons for the drastic drop in their recent sales is their lack of a good marketing strategy. He says to keep the customers loyal to their products they need to promote their products further. Then, he suggests the marketing of their products be given to 'H Capture marketing firm' which is known to charge a large sum of money for their work, He does not disclose he is a partner in the firm. The other two directors agree to it as they think Kingston knows about marketing more than them

After obtaining a loan from a bark, PC starts a new store in Chadstone stopping centre. Soon, they realise the mistake they have made as they have lost further customers and are facing even severe financial difficulties due to the monthly prepayments of their loan. The company is unable to pay its debts and a liquidator has been appointed.

Answer the following question. you must support your answer with relevant statutory provision and case law. IN IRAC FORMAT

Explain the defenses available under the Corporations ACT for directors in the event of an insolvency of a company and discuss whether any of them are available to Princes, Queenie and Kingston