The U.S. Supreme Court case Bank of America National Trust and Savings Association v. 203 North LaSalle Street Partnership in 1998 revolved around the issue of bankruptcy reorganization plans, specifically those involving a debtor's pre-bankruptcy equity holders retaining property under the plan over the objection of a secured creditor class without providing new value to that class. The court held that such an arrangement was not permissible under Chapter 11 of the Bankruptcy Code unless it was subjected to competitive bidding or market valuation mechanisms, as this would ensure fairness and prevent collusion between insiders at expense of creditors. This decision came after Bank Of America objected to a reorganization plan proposed by LaSalle Street Partnership where existing partners were given exclusive rights to contribute new capital and retain ownership, arguing it violated their rights as secured creditors.

In the dissenting opinion for Bank of America National Trust and Savings Association v. 203 North LaSalle Street Partnership, Justice Thomas argued that the majority's decision was inconsistent with previous bankruptcy law interpretations. He contended that there is no statutory basis to distinguish between new value contributed by an old equity holder and new value from any other source. The justice believed that this distinction created a "new-value corollary" which allowed old equity holders to receive property on account of their prior interest without competing bids or market valuations, contrary to what he viewed as the intent of bankruptcy laws. In his view, such a rule could potentially be exploited by insiders at the expense of unsecured creditors. Therefore, he disagreed with the majority's ruling in favor of 203 North LaSalle Street Partnership.