Some small California borrowers have commenced arbitration proceedings against FRS and First Associates, Argon`s credit service providers, on the grounds that the derailment they borrowed was not valid because they did not comply with California`s lending right. The loan agreements signed by the borrowers with Argon included binding arbitration clauses. The Bankruptcy Court had previously concluded that this arbitration procedure was covered by automatic stay, although Argon himself was not a defendant, since the loan contracts were the property of the estate and the borrowers sought explanations that the contracts were invalid. (The bankruptcy court found some uncertainty as to whether such argon statements, an arbitration-related party, concluded that there was some possibility that they would do so.) The borrowers therefore applied for an automatic suspension exemption to allow them to continue the arbitration. In the event of an insolvency application, an application for automatic suspension comes into effect and is the subject of proceedings against the debtor or the debtor`s property. 11 U.S.C No. 362.a. The stay centralizes disputes concerning the debtor and his assets in the debtor`s bankruptcy proceedings. If the pre-bankruptcy contract contains a compromise clause, a bankruptcy court will consider whether the stay should be executed or whether the parties can settle the matter through arbitration.

In Re Argon Credit, LLC, No. 16-39654 (Bankr. N.D. ILL. Sept. 21, 2018), a bankruptcy court considered the issue in a dispute between two non-indebted parties over the validity of the debtor`s loans and part of the debtor`s estate. The Bankruptcy Court ruled that the arbitration clause was binding and ordered the stay to allow the arbitration procedure to proceed. (16) The above analysis leads the sole arbitrator to conclude that the two respondents are bound by the compromise clause of the loan agreement on the basis of which the applicant initiated this arbitration proceeding.

Accordingly, the sole arbitrator has jurisdiction to rule on the applicant`s claims against the two respondents. No opinion is expressed and the individual arbitrator has not formed an opinion on the merits of the dispute. Romero opted for arbitration in his third loan contract, but he did not opt for derSchied in the first and second loans. Romero sued Title Max and claimed that its title credit business was contrary to the New Mexico Consumer Protection Act and common law. TitleMax has appealed arbitration for all claims related to the three loan contracts. (10) The respondents seek to challenge the validity and applicability of the compromise clause of the loan agreement by arguing that the loan agreement itself “is not legally valid because it has changed over a specified period of time and has been replaced by several agreements that have thus terminated the arbitration jurisdiction in Finland.” Therefore, the sole arbitrator must consider the impact of the alleged disability of the loan contract on the compromise clause it contains. (8) Given that respondent 1 entered into the loan agreement and its three amendments, the applicant`s claims against respondent 1 clearly fall within the scope of the compromise clause on which the applicant relies.