Cole Madsen v. A. J. Bumb, Receiver and Trustee for the Estate of Chase Capital Corporation, Dba Quail Valley Country Club, a California Corporation

Defendant-appellant Cole Madsen (hereinafter Madsen) appeals from a Default Judgment and the Order for Default Judgment entered on December 4, 1967. He alleges various grounds for reopening the judgment. We find all arguments without merit and sustain the action of the district court.

This action is a part of the proceedings in bankruptcy against the Chase Capital Corporation. Chase, a public stock corporation, was engaged in operating the Rainbow Angling Club and the Quail Valley Country Club. In addition, it had sold subdivided lots near the Quail Valley facility.

In 1958 Madsen and an associate obtained an option to purchase a controlling interest in Chase Capital Corporation. Thereafter, as alleged by the complaint of the trustee in bankruptcy, Madsen initiated a complex scheme to fraudulently divert assets of the Corporation to his own use; without any investment of his own funds, Madsen successfully looted Chase of sums running into the hundreds of thousands of dollars.

Bankruptcy proceedings involving Chase Capital began on October 4, 1962 by a petition under Chapter XI for a plan of arrangement. A. J. Bumb was appointed receiver. On September 5, 1963 Chase was…