In the 1925 case of Price, Receiver v. United States, the Supreme Court was asked to determine whether a tax assessment against an insolvent bank could be collected from its receiver. The bank had been declared insolvent and placed into receivership before the taxes were assessed but after they accrued. The court held that under federal law, no unsecured debt could be collected from a national banking association in receivership unless it was proven to have existed at the time when it went into receivership. Since there was no evidence showing that any part of this tax liability had been definitely determined or even estimated by anyone prior to insolvency proceedings being initiated for this particular bank, it did not qualify as such a debt and thus couldn't be collected from its receiver.

In the dissenting opinion for Price, Receiver v. United States, Justice McReynolds disagreed with the majority's interpretation of Section 57j of the Bankruptcy Act. He argued that this section should not be read to allow a bankrupt entity to recover payments made in good faith before bankruptcy was declared if those payments were made without knowledge or reason to believe that preferential treatment would result. According to him, such an interpretation is contrary both to common sense and sound policy because it discourages creditors from dealing with struggling businesses out of fear they may later have their repayments invalidated by a court order. This could potentially exacerbate financial difficulties and hasten insolvency rather than prevent it.