In the 1991 case Connecticut National Bank v. Thomas M. Germain, Trustee for the Estate of O'Sullivan's Fuel Oil Co., Inc., the U.S Supreme Court ruled on whether a bankruptcy trustee could recover payments made by a debtor to a creditor prior to filing for bankruptcy under section 547(b) of the Bankruptcy Code. The court held that such payments were not "transfers...for or on account of an antecedent debt" and thus could not be recovered by the trustee unless they enabled the creditor to receive more than it would have in a Chapter 7 liquidation proceeding absent those transfers (i.e., if they constituted preferences). This decision clarified how courts should interpret and apply this provision of federal bankruptcy law, providing important guidance for future cases involving similar issues.

In the dissenting opinion for Connecticut National Bank v. Germain, Justice Scalia argued that the majority's interpretation of 11 U.S.C § 1821(e)(8) was incorrect. He believed that this section should not be read to bar all claims against a failed bank’s assets once it is taken over by FDIC, but only those claims which are contingent or unliquidated at the time of takeover. The majority's reading would mean that any claimant who had not yet obtained judgment before takeover could never recover from the bank’s assets – an outcome he found absurd and unjustifiable under any plausible policy rationale. Furthermore, he disagreed with their assertion that allowing such claims would undermine financial stability; on contrary, he suggested it might enhance stability by encouraging potential claimants to pursue their rights promptly rather than waiting until after a bank failure.