The case of Woods, Court Trustee v. City National Bank and Trust Co. of Chicago et al., in 1940 revolved around the issue of whether a federal court sitting in bankruptcy had jurisdiction to enjoin proceedings in state courts involving property that was part of the bankrupt estate. The Supreme Court held that under Section 2(a)(15) and (7) of the Bankruptcy Act, a federal court has exclusive jurisdiction over all property belonging to a bankrupt's estate wherever located, including rights or claims against third parties arising from such properties. This means it can prevent any interference with this property by other courts unless permission is granted for them to proceed with their cases. In this particular case, an Illinois bank had initiated foreclosure proceedings on certain real estate owned by the debtor before he declared bankruptcy; after his declaration, however, these assets came under control of his trustee who sought an injunction against further action by the bank which was upheld by higher courts.

In the dissenting opinion for Woods v. City National Bank and Trust Co., Justice Roberts argued that the majority's decision to allow a trustee in bankruptcy to recover payments made by an insolvent debtor was inconsistent with previous rulings of the Court. He contended that such payments, when made in good faith and without knowledge of insolvency, should not be considered fraudulent transfers subject to recovery under federal law. According to him, this interpretation would unfairly penalize creditors who had no reason to suspect their debtor's financial instability at the time they received payment. Furthermore, he expressed concern about potential negative impacts on commercial transactions if creditors could not rely on receiving payment without fear of later having it taken away.