In Re Allen & Hein, Inc.

MEMORANDUM DECISION

RE: MOTION FOR RELIEF FROM STAY

Movant Orange Belt District Council of Painters No. 48 (“Union”) seeks relief from the automatic stay in order to arbitrate a dispute between it and debtor concerning interpretation of their collective bargaining agreement (the “Agreement”). Union contends that a non-debtor corporation controlled by the wife of the principal shareholder and officer of debtor is a “controlled entity” under the terms of the Agreement. If the Union proves its allegations, the wife’s corporation, Color Unlimited, would also be subject to the Agreement. The parties to this dispute commenced arbitration proceedings in June 1984, before an arbitrator jointly selected. The parties were scheduled to resume their arbitration in February 1985, and would have but for the filing of the debtor’s petition.

ISSUE

Whether relief from the automatic stay of § 362(a)(1) should be granted to allow an arbitration proceeding pending at the time the petition for relief is filed to go forward.

DISCUSSION

Federal law strongly favors enforcement of arbitration agreements. The United States Supreme Court has expressly recognized this policy. United Steel Workers v.…