In the 1973 case of Baker et al., Trustees in Reorganization v. Gold Seal Liquors, Inc., the U.S. Supreme Court ruled on a dispute involving bankruptcy law and liquor licenses. The trustees for Chicago Rapid Transit Company (CRT), which was undergoing reorganization under federal bankruptcy laws, sought to sell CRT's liquor license as part of its assets to pay off creditors. However, Illinois state law prohibited such sales without approval from local authorities who refused consent in this instance. The question before the court was whether federal bankruptcy law preempted state regulations prohibiting transfer of a debtor’s liquor license without permission from local authorities. The Supreme Court held that while Congress had broad power under the Bankruptcy Clause of Constitution to establish uniform laws throughout United States regarding bankruptcies, it did not intend for these powers to override all types of state legislation pertaining to property rights or transfers thereof; including those related specifically with public health and safety matters like control over sale and distribution of alcoholic beverages within their jurisdictions. Therefore, even though CRT's trustee could include its valuable liquor license among assets available for paying off debts during reorganization process under federal bankruptcy rules; they were still subject to Illinois' regulatory authority requiring prior approval before any such transaction could be legally executed.

In the dissenting opinion for Baker et al., Trustees in Reorganization v. Gold Seal Liquors, Inc., it was argued that the majority's decision to allow bankruptcy trustees to reject executory contracts without court approval undermines a fundamental principle of contract law: that parties should be able to rely on their agreements being enforced as written. The dissenting justices believed this power given to trustees is too broad and could lead to abuse or unfairness. They also expressed concern about potential negative impacts on commerce if businesses cannot trust that their contracts will be honored in bankruptcy proceedings. Furthermore, they disagreed with the majority's interpretation of Section 313(1) of Chapter X of Bankruptcy Act, arguing instead that it requires court approval before an executory contract can be rejected by a trustee.