In the case of Flanders, as Trustee of Coleman, v. Coleman in 1918, the United States Supreme Court was asked to determine whether a trust established under Texas law could be used to shield assets from creditors. The court ruled that it could not and held that a debtor cannot use a self-settled spendthrift trust (a type of legal arrangement where an individual places assets into a trust but retains some level of control over them) to avoid paying his or her debts. In this specific case, Mr. Coleman had transferred all his property into such trusts for the benefit of himself and his wife while he was heavily indebted with no other significant means to pay off those debts. The court found this action fraudulent against existing creditors because it essentially allowed him to keep control over his property without allowing any claims by creditors on these properties.

The dissenting opinion in the case of Flanders, as Trustee of Coleman, v. Coleman argued that the majority's decision to uphold a lower court ruling was incorrect due to an improper interpretation of bankruptcy law. The dissent contended that the debtor should not be allowed to retain property rights over certain assets because they were transferred after he had filed for bankruptcy. They believed this violated the spirit and intent of bankruptcy laws which aim at equitable distribution among creditors by gathering all possible resources from a bankrupt party. Furthermore, they disagreed with allowing debtors to manipulate their financial situation post-bankruptcy filing in order to protect certain assets from being used towards repayment obligations.