257. Transactions at an undervalue

(1) Where a Company is in administration or winding-up and has at a relevant time (as defined in Section 259 (Relevant time)) entered into a transaction with any person at an undervalue, the Court may, on application of the administrator of the Company or the liquidator, make an order restoring the position to what it would have been if the Company had not entered into that transaction.
(2) A Company enters into a transaction with a person at an undervalue if it —
(a) makes a gift to that person or otherwise receives no consideration under the transaction; or
(b) receives consideration under the transaction with a value, in money or money's worth, which is significantly less than the value, in money or money's worth, of the consideration provided by the Company.
(3) The Court shall not make an order under subsection (1) in respect of a transaction at an undervalue if it is satisfied —
(a) that the Company which entered into the transaction did so in good faith and for the purpose of carrying on its business; and
(b) that at the time it did so there were reasonable grounds for believing that the transaction would benefit the Company.
(4) Where a Company has entered into a transaction at an undervalue with another person and the Court is satisfied the entry into the transaction by the Company was for the purpose of —
(a) putting assets beyond the reach of a person who is making, or may at some time make a claim against it; or
(b) otherwise prejudicing the interests of such a person in relation to a claim which he is making or may make,
the Court may make an order restoring the position to what it would have been if the Company had not entered into that transaction or protecting the interests of any victim of the transaction but having regard to the interests of persons who acquired any interest in property in good faith, for value and without notice of the relevant circumstances.
(5) An application under subsection (4) shall only be made by a liquidator or administrator of the Company or (with leave of the Court) a victim of the transaction.
(6) References to a victim of the transaction are to a person who is, or is capable of being, prejudiced by it.