The U.S. Supreme Court case Bryant, Trustee of Newton & Co., Bankrupts, v. Swofford Bros. Dry Goods Co., in 1908 revolved around the issue of bankruptcy and preferential payments to creditors. The bankrupt company, Newton & Company had made a payment to Swofford Brothers Dry Goods Company shortly before declaring bankruptcy which was challenged by Bryant as being a preference under the Bankruptcy Act of 1898 - meaning that one creditor (Swofford) was unfairly favored over others by receiving payment while other creditors received nothing or less than their due share from the insolvent debtor's estate. The court ruled in favor of Bryant stating that even though there might not have been an intent on part of Newton & Co to give preference to any particular creditor at time when it paid its debt owed to Swofford Bros., such transaction could still be deemed voidable if it resulted in giving unfair advantage or 'preference' over other creditors within four months prior to filing for bankruptcy.

In the dissenting opinion for Bryant, Trustee of Newton & Co., Bankrupts v. Swofford Bros. Dry Goods Co., Justice Holmes disagreed with the majority's interpretation of bankruptcy law and its application to this case. He argued that a debtor should not be allowed to prefer one creditor over another in anticipation of bankruptcy because it undermines the principle of equal distribution among creditors, which is fundamental to bankruptcy law. In his view, allowing such preferences would incentivize debtors on the brink of insolvency to favor certain creditors at others' expense, thereby undermining fairness and equity in bankruptcy proceedings. Furthermore, he contended that any act done by an insolvent debtor within four months prior to filing for bankruptcy with intent or reasonable cause to believe that a preference might occur should be deemed voidable under Section 60b of the Bankruptcy Act.