Will, Smith, Chris and Jada are the 4 directors of Academy Entertainment Pty Ltd ("Academy"). Academy is an industry leader in developing cinema quality sound and lighting effects for home cinemas. Academy recently spent several million dollars on developing revolutionary 'spatial audio' technology which promises to give users an unparalleled, fully immersive audio experience. The development of the new technology has suffered a number of engineering set-backs and has not proceeded as planned. The Chief Operating Officer of Academy sent a report to the directors explaining that:- - Academy was suffering from cash flow difficulties; - Academy had not been paying many of its creditors; - Rival technologies were emerging from well-known international competitors; and - The prospects of Academy raising further capital by either borrowing or further equity injections were limited. At a recent board meeting (of Academy), which was attended by Smith, Chris and Jada, the directors resolved to enter into an agreement with a Japanese engineering firm to purchase the component parts, required to make the technology successful. Will was away on holidays and does not attend the board meeting. He was having a lovely time in Bali drinking Bintang and various cocktails at Omnia Day Club. 1. Advise ASIC whether the conduct of any of the directors amounts to a breach of the insolvent trading provisions in the Corporations Act 2001. Your answer should consider any relevant defences that the directors may be able to rely upon. 2. If the directors of Academy have breached their duty to prevent insolvent trading, what action (if any) can ASIC take against them?