The Central Trust Company of Illinois, trustee of the bankrupt Frank E. Scott Transfer Company, filed a suit against the Chicago Auditorium Association in 1915. The case revolved around a lease agreement between the two parties that was signed prior to Scott's bankruptcy declaration. The Supreme Court had to determine whether or not this lease could be considered an executory contract and thus subject to rejection under bankruptcy law. In its decision, the court ruled that because both parties still had significant performance obligations remaining under their agreement at the time of bankruptcy filing, it indeed constituted an executory contract and could therefore be rejected by Central Trust as part of its duties as trustee for Scott's estate.

In the dissenting opinion for Central Trust Company of Illinois v. Chicago Auditorium Association, it was argued that the majority's decision to uphold a lower court ruling - which allowed a bankrupt company to reclaim property sold under an unrecorded deed - contradicted established legal principles and precedent. The dissenting justices contended that this ruling unjustly penalized innocent third parties who had no knowledge of the unrecorded deed at the time they purchased or invested in said property. They further asserted that such a decision would create uncertainty in real estate transactions and undermine public confidence in recorded deeds as reliable evidence of ownership. In their view, if an individual or entity fails to record its deed promptly, it should bear any resulting loss rather than shifting this burden onto unsuspecting subsequent purchasers or investors.