Transactions defrauding creditors: undervalued transfers may be reversed, with safeguards for good-faith purchasers and beneficiaries.

A new provision addresses transactions defrauding creditors where a debtor has entered into an undervalued transaction deliberately to place assets beyond the reach of claimants or to adversely affect their interests. The Adjudicating Authority may restore the pre-transaction position and protect victims of the transaction. The provision preserves good-faith, value-based interests acquired without notice and does not require repayment by good-faith beneficiaries unless they were parties to the transaction.

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