Lines v. Frederick

Summary

The Court held that a bankrupt wage earner's accrued but unpaid vacation pay is not property that passes to the bankruptcy trustee under § 70a (5) of the Bankruptcy Act. It reasoned that the pay is part of the debtor's wages and is closely tied to the debtor's ability to obtain a fresh start and meet basic needs, unlike an asset arising from a failed business. Justice Hablan, dissenting, would have set the case for full argument because the issue was close, the record was unclear, and relevant state law had not been resolved.