Preferential transactions: mechanism to reverse transfers that unfairly advantaged creditors or related parties before insolvency.

Sections 43 and 44 enable the resolution professional or liquidator to seek avoidance of preferential transactions where a corporate debtor transferred property to benefit a creditor, surety or guarantor for antecedent liabilities such that the recipient is better off than under insolvency distribution. Exclusions include transfers in the ordinary course and certain security for new value. Relevant time is two years for related parties and one year for others. Section 44 permits orders to vest property, vest proceeds, release security, require restitution of benefits, revive guarantor liabilities or provide replacement security, subject to protections for bona fide purchasers.

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