In Brief
A hotel company in financial distress was admitted into the Insolvency and Bankruptcy Code process, triggering an automatic legal freeze (moratorium) on all lawsuits and claims against it. Despite this freeze, one creditor initiated arbitration proceedings and appealed in district court. The Supreme Court held that arbitration cannot proceed once the moratorium takes effect and is void as never having existed. The Court set aside the district court order, quashed related criminal proceedings designed to derail the insolvency process, and held that insolvency proceedings must continue unimpeded by other courts. Appeal allowed.
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