In the case of Knapp v. Milwaukee Trust Company, the U.S Supreme Court was tasked with determining whether a claimant could recover funds from a bankrupt estate for services rendered prior to bankruptcy proceedings. The claimant, Mr. Knapp, had been employed by Standard Telephone & Electric Company and sought compensation for his work after the company declared bankruptcy. However, he did not file his claim until after an order of distribution had already been made by lower courts. The Supreme Court ruled against Mr.Knapp stating that he should have filed his claims during the initial bankruptcy proceedings as required under federal law at that time (Bankruptcy Act of 1898). Therefore, it held that any claims made after such proceedings were invalid and could not be recovered from the bankrupt estate.

The dissenting opinion in the case of Knapp v. Milwaukee Trust Company argued that the majority's decision was incorrect because it failed to properly interpret and apply bankruptcy law. The dissent believed that the bankrupt company, Standard Telephone & Electric Company, should not have been allowed to transfer its assets to another entity without first paying off its debts. They contended that this action violated creditors' rights and undermined the purpose of bankruptcy laws, which is to ensure fair distribution of a debtor's assets among all creditors. Furthermore, they disagreed with the majority's interpretation of "fraudulent intent," arguing that it should be broadly construed to include any actions taken by a debtor with knowledge or reason to know would hinder or delay their creditors from receiving payment for their claims.