In the 1965 case of Segal, DBA Segal Cotton Products, et al. v. Rochelle, Trustee in Bankruptcy, the U.S Supreme Court ruled that a bankrupt business's "identifiable proceeds" from pre-bankruptcy sales could be claimed by its trustee to pay off creditors. The court held that such proceeds were part of the debtor's estate even if they had been commingled with other funds and thus lost their identity as separate assets. This decision was based on Section 70a(5) of the Bankruptcy Act which allowed trustees to recover any property transferred by a bankrupt within four months prior to filing for bankruptcy if it would have been voidable by any creditor under state law at the time it was made or incurred.

In the dissenting opinion for Segal v. Rochelle, Justice Harlan argued that the majority's decision to allow a bankrupt debtor to claim an exemption for wages earned but not yet paid was inconsistent with both the language and intent of federal bankruptcy law. He contended that such earnings were "property" subject to distribution among creditors under Section 70a(5) of the Bankruptcy Act because they represented compensation for services rendered prior to filing bankruptcy. Furthermore, he disagreed with the majority's interpretation of "necessaries," asserting it should be limited only to those items necessary at time of bankruptcy filing rather than future needs like unpaid wages. Lastly, he expressed concern over potential abuse by debtors who might strategically delay their filings until after earning significant income in order to shield these funds from creditors.