Rothschild

MEMORANDUM

Verit Hotel & Leisure (International) Limited (“VHL”) appeals an order of the District Court, which (1) affirmed the bankruptcy court’s denial of VHL’s Motion to Set Aside Default Judgment on the ground that the bankruptcy court’s prior determination that it had personal jurisdiction over VHL was entitled to res judicata effect; and (2) affirmed the bankruptcy court’s order granting the Trustee’s motion for a declaration of constructive trust over stock that was the subject of the Default Judgment previously entered against VHL. We reverse the district court’s order and remand for proceedings consistent with this memorandum.

“The parties are familiar with the facts and proceedings below so we do not recite them here. VHL contends that the default judgment entered against it should be vacated because the bankruptcy court did not have personal jurisdiction over it. The district court affirmed the bankruptcy court’s denial of VHL’s Motion to Set Aside Default Judgment and held that VHL was barred from arguing lack of personal jurisdiction in connection with its Motion to Set Aside Default Judgment. Relying on United States v. Van Cauwenberghe, 934 F.2d 1048 (9th…