Undervalued transactions defrauding creditors trigger restoration of assets and protection of victims, subject to good-faith safeguards. Where a debtor enters into an undervalued transaction deliberately to keep assets beyond the reach of claimants or to adversely affect their interests, the Adjudicating Authority must restore the pre-transaction position and protect victims. The provision applies only where the transaction was entered into with that improper purpose. Protective limits preserve good-faith acquisitions for value without notice, and a recipient of benefit is not required to repay unless that person was a party to the transaction.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Undervalued transactions defrauding creditors trigger restoration of assets and protection of victims, subject to good-faith safeguards.
Where a debtor enters into an undervalued transaction deliberately to keep assets beyond the reach of claimants or to adversely affect their interests, the Adjudicating Authority must restore the pre-transaction position and protect victims. The provision applies only where the transaction was entered into with that improper purpose. Protective limits preserve good-faith acquisitions for value without notice, and a recipient of benefit is not required to repay unless that person was a party to the transaction.
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