In the case of Ludvigh, Trustee in Bankruptcy of Horowitz v. American Woolen Company of New York (1913), the Supreme Court ruled on a dispute involving bankruptcy and contract law. The trustee for Mr. Horowitz's bankrupt estate, Mr. Ludvigh, sued to recover payments made by Horowitz to the American Woolen Company under an executory contract that was not fully performed before bankruptcy proceedings began. The court held that such payments could be recovered if they were made while insolvent and within four months prior to filing for bankruptcy as per section 60b of the Bankruptcy Act - which allows trustees to reclaim preferential transfers given by debtors who are insolvent at time of transfer or become so as result thereof; provided it is done within four months before filing petition in bankruptcy.

In the dissenting opinion for Ludvigh, Trustee in Bankruptcy of Horowitz v. American Woolen Company of New York, Justice Holmes disagreed with the majority's decision to allow a creditor to reclaim goods from a bankrupt debtor on grounds that they were delivered under fraudulent circumstances. He argued that such an interpretation was inconsistent with bankruptcy law and its purpose - which is to distribute assets equitably among all creditors rather than favoring one over others. Furthermore, he contended that allowing this would undermine the trustee’s role as representative of all creditors by permitting individual creditors to bypass him and directly seize assets from the debtor. This could potentially lead to chaotic situations where multiple claims are made against limited resources without any orderly process or fair distribution mechanism in place. Therefore, according to Justice Holmes' view, once goods have been delivered they should be considered part of the debtor's estate regardless of any alleged fraud involved in their acquisition.