Default against Bally Total Fitness set aside due to bankruptcy
Steven Bonner sued Bally Total Fitnress to enforce a contract. Bally had filed for bankruptcy and didn't answer the Complaint. Bonner attempted to enter a default judgment and Bally resisted, pointing to the automatic bankruptcy stay, or injunction preventing debt collection actions against it during the pendency of the bankruptcy. The trial court refused to enter judgment against Bally and Bonner appealed. The Court of Appeals upheld the lower court and dismissed Bonner's case.