IN RE PONTIOUS BROTHERS EXCAVATING, INC., (Bankr.C.D.Ill. 2000)

GERALD D. FINES, United States Bankruptcy Judge.

This matter having come before the Court sua sponte; the Court, having reviewed the record of Debtor's bankruptcy proceeding and correspondence from the United States District Court, in Case No. 98-2030, and being otherwise fully advised in the premises, makes the following findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.

The Debtor Corporation herein filed for relief under Chapter 7 of the Bankruptcy Code on May 11, 1998, and an Order for Relief Under Chapter 7 was entered on May 12, 1998.

This matter has proceeded as an asset case. At this time, the Trustee in Bankruptcy, Steve Miller, is administering the assets in this case and proceeding toward a final distribution of the assets to the creditors of the Debtor at the earliest possible moment. Creditor, Construction Industry Welfare Fund, has filed a claim against the Debtor in this bankruptcy proceeding.

This claim has been allowed, and will be entitled to a pro rata distribution together with other creditors at the close of this case.

Prior to the filing of the instant bankruptcy proceeding, on February 9, 1998, Creditor, Construction Industry Welfare Fund, filed a lawsuit in the United States District Court for the Central District of Illinois. The subject matter of the lawsuit in the United States District Court is identical to the claim which has been filed and allowed in the instant bankruptcy proceeding.

The United States District Court is desirous of finalizing the litigation before it in Case No. 98-2030, and, at this time, this Court sees no reason why said litigation should not be finalized given the allowance of the claim of the Construction Industry Welfare Fund in the Debtor's bankruptcy proceeding. At this time, there appears to be no reason why the automatic stay, under 11 U.S.C. § 362, should not be lifted so as to allow the litigation in the United States District Court, in Case No. 98-2030, to go forward.

This case presents a highly unusual situation in that neither the Debtor/Defendant nor the Plaintiff/Claimant, Construction Industry Welfare Fund, have moved to have the automatic stay lifted under 11 U.S.C. § 362(d), so that the litigation in the United States District Court, in Case No. 98-2030, could proceed. The unusual nature of this case is further compounded by the fact that it is the Plaintiff/Claimant, Construction Industry Welfare Fund, that is asserting the automatic stay, under 11 U.S.C. § 362, as a reason for delaying any further action in the United States District Court case.

Although neither the Debtor/Defendant nor the Plaintiff/Claimant, Construction Industry Welfare Fund, have filed a motion in this Court for relief from the automatic stay, there appears to be no reason why the stay should not be lifted so as to allow the United States District Court to take action in its Case No. 98-2030. This Court finds that there is authority for it to sua sponte modify the automatic stay in order to allow the litigation to proceed in the United States District Court. In the case of In re Laventhol Horwath, 139 B.R. 109 (D.C. S.D. N.Y. 1992), the District Court for the Southern District of New York held that a bankruptcy court can sua sponte modify the automatic stay in order to allow litigation to proceed in another forum. Citing a case from the Seventh Circuit, In re Holtkamp, 669 F.2d 505 (7th Cir. 1982), the Court, in Laventhol Horwath, stated that: "The decision whether to lift the automatic stay rests largely with the discretion of the bankruptcy judge." In In re Sonnax Industries, 907 F.2d 1280 (2d Cir. 1990), the Second Circuit identified a series of factors the courts should consider in determining whether to modify a stay to allow a suit in another proceeding to go forward. In reviewing the factors set forth in Sonnax, this Court finds that, in the interest of judicial economy and the expeditious and economical resolution of litigation, no reason exists for the Plaintiff/Claimant, Construction Industry Welfare Fund, to continue to forestall litigation in the United States District Court Case No. 98-2030.

Based on the authority of In re Laventhol v. Horwath, supra, at 116, In re Holtkamp, supra, at 507, and 11 U.S.C. § 105(a), this Court concludes that the automatic stay should be lifted for cause under 11 U.S.C. § 362(d)(1), so as to allow the proceedings in the United States District Court Case No. 98-2030 to go forward without further delay.

For the reasons set forth in an Opinion entered on the _______ day of January 2001;

IT IS HEREBY ORDERED that the automatic stay under 11 U.S.C. § 362 is lifted so as to allow the case of Construction Industry Welfare Fund vs. Pontious Brothers Excavating, Inc., in the United States District Court for the Central District of Illinois, Case No. 98-2030, to proceed without further delay.