The U.S. Supreme Court case of Sampsell v. Imperial Paper & Color Corp., in 1940, revolved around the issue of bankruptcy and equitable distribution among creditors. The respondent, Imperial Paper & Color Corporation had obtained a judgment against the debtor before he declared bankruptcy and sought to have its claim satisfied ahead of other creditors from assets not included in the bankruptcy estate due to California law at that time. However, the trustee in bankruptcy contested this preferential treatment arguing for equal distribution among all creditors including those whose claims arose after adjudication but before final decree (known as "administration" claims). The Supreme Court ruled in favor of the trustee's argument stating that under Section 64b(7) of Bankruptcy Act it was permissible for courts to subordinate contractual or legal rights if necessary for “fairness and equity”. This decision established an important precedent known as 'equitable subordination' which allows courts discretion over payment priority when distributing bankrupt entities’ assets.

In the dissenting opinion for Sampell v. Imperial Paper & Color Corp., Justice Frankfurter disagreed with the majority's decision to allow a bankruptcy trustee to set aside preferential transfers made by a debtor within four months of filing for bankruptcy, even if those transfers were made in another country and under its laws. He argued that such an interpretation of Section 60b of the Bankruptcy Act was not intended by Congress and violated principles of international comity. According to him, U.S. law should not be applied extraterritorially unless explicitly stated in legislation or necessary implications from statutory text exist. In this case, he believed neither condition was met as there was no clear indication that Congress intended Section 60b to apply outside U.S borders nor any necessity implied from its language or purpose suggesting so.