In the case of Nathanson, Trustee in Bankruptcy v. National Labor Relations Board (1952), the U.S Supreme Court ruled that a bankruptcy trustee is not obligated to honor labor contracts made by a bankrupt employer if those contracts are burdensome and do not provide clear benefits for the estate. The court held that under Section 70b of the Bankruptcy Act, trustees have an obligation to assess whether executory contracts will benefit or burden an estate before deciding whether to adopt them. In this particular case, it was found that honoring labor agreements would be detrimental rather than beneficial for creditors because they were too costly. Therefore, these agreements were rejected by Nathanson as part of his duty as trustee in bankruptcy.

In the dissenting opinion for Nathanson, Trustee in Bankruptcy v. National Labor Relations Board (1952), Justice Minton argued that the majority's decision was inconsistent with previous rulings of the Court and failed to consider important aspects of bankruptcy law. He contended that a trustee in bankruptcy should not be held liable for unfair labor practices committed by an employer prior to bankruptcy proceedings because such liability would unfairly burden innocent creditors who had no part in these actions. Furthermore, he asserted that this ruling could discourage potential buyers from purchasing bankrupt businesses out of fear they might inherit unknown liabilities, thus undermining one of the key goals of bankruptcy law: preserving business entities and maximizing asset value for creditors' benefit. In his view, holding trustees accountable for past wrongs committed by employers is both unjust and counterproductive.