In the 1935 case of Bronx Brass Foundry, Inc. v. Irving Trust Co., Trustee, the U.S Supreme Court dealt with a bankruptcy dispute involving priority of payment to creditors. The issue at hand was whether or not wage claims by employees should be given preference over secured creditors in cases where there is insufficient property to satisfy all claims. The court ruled that under Section 64b of the Bankruptcy Act, wage earners are entitled to priority for wages due them within three months before bankruptcy up to $600 each from any remaining assets after legal costs and administration expenses have been paid but before distribution among general unsecured creditors or secured ones whose security has been preserved for benefit of estate as whole.

In the dissenting opinion for the Bronx Brass Foundry, Inc. v. Irving Trust Co., Trustee case, it was argued that the majority's decision failed to properly interpret and apply bankruptcy law principles. The dissent emphasized that a trustee in bankruptcy should not be allowed to recover payments made by an insolvent debtor in good faith prior to declaring bankruptcy if those payments were part of normal business operations and did not prefer one creditor over another. They contended that such transactions are essential for commercial life and their invalidation would disrupt trade relationships, create uncertainty among businesses, and potentially discourage creditors from dealing with financially troubled companies out of fear their repayments could later be reclaimed in bankruptcy proceedings. Therefore, they believed this ruling contradicted established legal precedent on voidable preferences under Section 60b of the Bankruptcy Act which requires both insolvency at time of payment and a resulting preference towards certain creditors.