Virtual Vision, Inc. v. Praegitzer Industries, Inc.

Praegitzer Industries appeals the decision of the district court reversing the bankruptcy court’s denial of Blech & Company’s Rule 60(b)(4) motion to vacate the default judgment in favor of Praegitzer. The bankruptcy court had entered the default judgment on account of Blech’s failure to comply with a discovery request. We have jurisdiction pursuant to 28 U.S.C. § 1291 , and we reverse the district court’s decision.

FACTUAL AND PROCEDURAL BACKGROUND

This case arises from bankruptcy proceedings initiated by Virtual Vision, Inc. Praegit-zer and Blech are two of Virtual Vision’s creditors with competing claims to Virtual Vision’s assets.

After filing for Chapter 11 bankruptcy, Virtual Vision commenced this adversary proceeding to determine the priority of the security interests held by Praegitzer and Blech. On August 25, 1994, at the pretrial conference, the bankruptcy court announced that it had decided to expedite the proceeding due to the high-technology nature of the debtor’s business. The court set the trial date for October 18, 1994, and stated that responses to discovery requests should be provided within fifteen days of the request. On the following day, the court issued a…