The U.S. Supreme Court case Re Metropolitan Railway Receivership, 1907 involved the Metropolitan Street Railway Company of New York City which had defaulted on its interest payments and was placed into receivership. The court had to decide whether the company's bondholders or its shareholders should bear the brunt of losses resulting from a decline in value of collateral backing some bonds. The court ruled that when a corporation defaults on its debt obligations and is put into receivership, it is not necessary for all assets to be liquidated before any distribution can be made to stockholders; rather, after payment of debts secured by specific property liens, remaining assets may be distributed among stockholders even if unsecured creditors have not been paid in full. This decision established an important precedent regarding corporate bankruptcy law.

In the dissenting opinion for the case RE Metropolitan Railway Receivership, 1907, it was argued that the court had overstepped its bounds by intervening in a matter of corporate governance and finance. The dissenters believed that this intervention undermined principles of free enterprise and private property rights. They contended that if a company is unable to meet its financial obligations, it should be allowed to fail without interference from the courts or government. Furthermore, they expressed concern about setting a precedent where courts could intervene in business matters based on subjective assessments of what is 'fair' or 'equitable'. This could potentially lead to arbitrary decision-making and uncertainty within the business community. In their view, such issues are better resolved through negotiation between creditors and debtors rather than judicial intervention.