Curtis B. Danning, as Trustee in Bankruptcy of Fenton, Lavine & Co., a Partnership v. Beau Berlinski Lavine

The first issue on this appeal is whether a complaint by a bankruptcy trustee alleging that defendant had received either a fraudulent conveyance or a voidable preference was sufficient to support a default judgment. The second issue is whether or not an order holding defendant a recalcitrant witness under 28 U.S.C. § 1826 for refusing to. answer questions at a deposition may continue in effect after a default judgment has been entered against the defendant.

The appellee, Danning, is the trustee in bankruptcy for Fenton, Lavine & Co. (Fen-ton). Before commencement of the bankruptcy proceedings, Fenton was a clearinghouse member for the West Coast Commodities Exchange. In May of 1973 the Exchange determined that the funds in the accounts Fenton maintained for its customers were insufficient. The Exchange demanded that Fenton increase its capital by $200,000 to cover potential losses.

Then followed a series of alleged transactions by the appellant, Lavine, a co-principal in Fenton, and we summarize only the essential elements here. Using her maiden name, Lavine obtained a $200,000 bank loan and deposited the sum in the Fenton trading account. After the deposit was made, a check…