The U.S. Supreme Court case Gross et al. v. Irving Trust Co., Trustee in Bankruptcy, 1932 revolved around the issue of whether a trustee in bankruptcy could recover payments made by an insolvent debtor to its creditors within four months prior to filing for bankruptcy under Section 60b of the Bankruptcy Act. The appellants, who were creditors that received such payments from an insolvent company, argued that they had no reason to believe at the time of payment that insolvency was imminent and thus should not be required to return these funds. However, the court ruled against them stating that their knowledge or lack thereof regarding impending insolvency was irrelevant as per Section 60b which allows trustees in bankruptcy to reclaim any preferential transfers made during this period regardless of whether recipients suspected insolvency or not.

In the dissenting opinion for Gross et al. v. Irving Trust Co., Justice Cardozo disagreed with the majority's interpretation of Section 77B of the Bankruptcy Act, arguing that it was too narrow and restrictive. He believed that this section should be interpreted to include all claims against a bankrupt estate, not just those arising from property owned by the debtor at the time bankruptcy proceedings began. This broader interpretation would allow more creditors to participate in reorganization plans and potentially recover some of their losses, which he felt was consistent with Congress' intent when they passed this legislation during Great Depression era reforms aimed at protecting creditors' rights and promoting economic stability. Furthermore, he argued that limiting participation only to those who held claims on property could lead to unfair outcomes where certain creditors were favored over others based purely on timing or chance rather than any substantive difference in their legal rights or interests.