In the 1969 case of New York, New Haven & Hartford Railroad Co. First Mortgage 4% Bondholders Committee v. United States et al., the U.S. Supreme Court ruled on a dispute related to railroad reorganization under Section 77 of the Bankruptcy Act. The bondholders' committee argued that their interests were not adequately protected in a plan approved by Interstate Commerce Commission (ICC) for merging two financially troubled railroads - New York, New Haven and Hartford Railroad Company with Penn Central Transportation Company. They contended that they should receive more compensation than what was proposed in the merger plan due to their secured creditor status. The Supreme Court upheld ICC's decision stating it had broad discretion in approving such plans considering public interest and fair treatment of all parties involved including creditors and shareholders alike, even if this meant secured creditors might not get full value for their claims as long as they received at least some reasonable compensation.

In the dissenting opinion for the case of New York, New Haven & Hartford Railroad Co. First Mortgage 4% Bondholders Committee v. United States et al., Justice Harlan argued that the court majority had overstepped its bounds by approving a reorganization plan for a bankrupt railroad company without sufficient consideration of creditors' rights and interests. He contended that while public interest is an important factor in such cases, it should not override other considerations like fairness to creditors who have legitimate claims against the company's assets. The justice also criticized his colleagues for failing to adequately scrutinize whether or not there was any feasible alternative to liquidation which would better serve both public and private interests involved in this matter.