Rainbow Pioneer 44-18-04a, a General Partnership v. Hawaii-Nevada Investment Corporation, a Nevada Corporation, and Herman B. Rothbard
Opinion
Opinion
Solomon, J.
District Judge:
Introduction
The appellees filed this action for damages and for declaratory, injunctive and other equitable relief. They allege that appellants misled them into making certain investments and then diverted and embezzled their funds. The appellants appeal the district court order of default and partial default judgment which was entered against them because they failed to comply with a magistrate’s order to compel discovery. They contend the district court abused its discretion when it imposed such an extreme sanction.
Appellant Rothbard also appeals the order requiring him and the other appellants to pay the fees and costs of the court-appointed receiver. He contends the receiver lacked authority to act because he failed to post the bond required by the order appointing him.
Facts
The appellees are fourteen general partnerships and their individual partners. The appellants are Herman Rothbard and three related corporations he organized under the laws of Nevada: Hawaii-Nevada Investment Corp. (HNIC), Nevada Investment Corp. (NIC), and Nevada Acquisitions, Inc. (NAI).
From 1976 to 1978, Rothbard, through HNIC and NIC, promoted and sold interests in general…