In the 1909 U.S. Supreme Court case Blake, Trustee in Bankruptcy, v. Openhym, the court examined whether a debtor's transfer of property to a creditor could be deemed fraudulent and therefore voidable under bankruptcy law if it was made with intent to prefer one creditor over others. The defendant had received payment from the bankrupt party for an antecedent debt shortly before bankruptcy proceedings were initiated against that party. The plaintiff argued this constituted a preference and sought recovery of the funds on behalf of all creditors. The Supreme Court ruled in favor of Openhym (the defendant), stating that such transfers are not necessarily fraudulent or illegal unless they are done with actual intent to defraud other creditors or violate provisions specifically outlined by bankruptcy laws. It further clarified that mere knowledge on part of the preferred creditor about debtor's insolvency is insufficient proof for fraudulence; there must be evidence showing active participation or collusion between them intending harm towards other creditors.

In the dissenting opinion for Blake v. Openhym, it was argued that the court majority had incorrectly interpreted bankruptcy law and its application to this case. The dissenting justices believed that the debtor's property should not have been exempted from seizure by creditors because he had fraudulently transferred it to his wife in an attempt to avoid paying his debts. They contended that such a fraudulent transfer violated both the spirit and letter of bankruptcy laws designed to ensure fair treatment of all parties involved in a bankruptcy proceeding. Furthermore, they disagreed with the majority's interpretation of "fraudulent intent," arguing instead for a broader understanding which would include any action taken with knowledge or reasonable expectation that it would hinder, delay or defraud creditors.