I think you've got something backwards. The arms-length principle is not literally a requirement to be unrelated. It is a requirement to act that way. If one b

I think you've got something backwards. The arms-length principle is not literally a requirement to be unrelated. It is a requirement to act that way. If one brother sells another brother a moving truck for 40000 USD, it is an arms-length transaction. If he sells it for 1 USD, that is not. It's a non-arms-length transaction because of the value, not because they are brothers! In some of the cases you mention, it's difficult to assess fair value even when it's determined by an arms-length transaction, so the sudden disclosure of a relationship would not make it at all straightforward to take anyone to court over it. The commercial property without a tenant for nearly a decade isn't worth 40k USD / month. When you say "...these two companies signed a contract that values it at that figure as collateral for a loan...", you are describing fraud. That could arise not because of any plan of fraud prior to the loan agreement but because of one formed during it!