In the 1918 case Williams v. Vreeland, the U.S. Supreme Court was tasked with determining whether a bank receiver could recover funds from an individual who had received preferential payments prior to the bank's insolvency. The defendant, Vreeland, had been paid by First National Bank of Bayonne before it went insolvent and its assets were placed under receivership. The plaintiff, Williams as receiver for the failed bank, sought to reclaim these funds arguing that they constituted a preference because they were made within four months of declaring bankruptcy and while insolvent or in contemplation thereof. The court ruled in favor of Williams stating that such payments did constitute preferences under Section 60b of the Federal Bankruptcy Act if made while insolvent or contemplating insolvency within four months preceding filing for bankruptcy protection; hence should be returned to ensure equitable distribution among all creditors during liquidation process. This decision established important precedent regarding preferential transfers and their treatment under federal law.

In the dissenting opinion for Williams v. Vreeland, Justice Louis Brandeis argued that the majority's decision was inconsistent with previous rulings and misinterpreted the National Bank Act. He contended that under this act, a bank receiver is not liable for interest on deposits after insolvency unless there are surplus assets after paying off all depositors' claims in full. The majority held that receivers must pay interest from date of demand regardless of whether there are sufficient funds to cover it or not - an interpretation which Brandeis believed would unfairly burden insolvent banks and their creditors while benefiting only a select group of claimants who made early demands. Furthermore, he pointed out inconsistencies between this ruling and earlier cases where courts had refused to allow post-insolvency interest when assets were insufficient to satisfy principal debts. Thus, he disagreed with imposing such liability on receivers without clear legislative mandate.