In the case of Schall et al. v. Camors et al., Trustees of the Bankrupt Estates of Lemore, Bankrupt, and Carriere, Bankrupt (1919), the US Supreme Court was asked to determine whether a bankruptcy trustee could recover payments made by an insolvent debtor prior to declaring bankruptcy that were intended as preferential payments towards certain creditors. The court ruled in favor of the trustees, stating that such transactions are voidable under Section 60a(1) of the Federal Bankruptcy Act if they occur within four months before filing for bankruptcy and while insolvent. This decision reinforced that all creditors should be treated equally during a bankruptcy proceeding and any attempt by an insolvent debtor to favor one creditor over another is not permissible under federal law.

The dissenting opinion in the case of Schall et al. v. Camors et al., Trustees of the Bankrupt Estates of Lemore, Bankrupt, and Of Carriere, Bankrupt argued that the majority's decision was inconsistent with previous rulings on bankruptcy law. The dissent contended that a trustee should not be allowed to recover payments made by an insolvent debtor before declaring bankruptcy if those payments were made in good faith and without knowledge of insolvency. They believed this interpretation would unfairly penalize creditors who had no reason to suspect their debtor's financial instability at the time they received payment for services rendered or goods provided. Furthermore, it was suggested that such a ruling could discourage trade and commerce as businesses might hesitate to engage with new clients out of fear they could later be forced to return payments received from them if they subsequently declare bankruptcy.