Nov. 11 (Bloomberg) -- Yellowstone Club, a private ski resort in Montana that lists Microsoft Corp. founder Bill Gates among its members, sought bankruptcy protection from creditors, citing a slump in real estate prices.

The club was unable to pay its creditors because of ``decreasing revenues brought on by, among other things, economic factors causing both difficulties in obtaining credit and declines in the real estate market,'' according to its filing in U.S. Bankruptcy Court in Butte, Montana.

The bankruptcy shows that even the most exclusive enclaves aren't safe from the deteriorating U.S. real estate market. Most of the club's revenue came from property sales. Lots once sold for $2 million and higher.

Like other troubled ventures, the Yellowstone Club borrowed heavily when times were good. In 2005, it borrowed $375 million from Zurich-based Credit Suisse Group.

The ski area at the Yellowstone Club will be open this winter, according to Bill Keegan, a spokesman for the club at Edelman in Chicago. Credit Suisse plans to arrange a $4.5 million loan to fund operations at the club in coming weeks, according to court papers.

Near Big Sky

The Yellowstone Club is located 20 miles (32.2 kilometers) north of Yellowstone National Park near Montana's Big Sky ski area. It's controlled by Edra Blixseth, who co-founded the club on 13,600 acres (5,500 hectares) of old logging land with her husband Tim in 2000.

Edra Blixseth took control of the spread in July after a bitter divorce, a fight that hurt sales at the club by raising questions about who would own and operate it.

Among the other members are News Corp. President Peter Chernin, hotelier Barry Sternlicht, and former Citigroup private banker Todd Thomson, who was ousted over expenses and his ties with CNBC television anchor Maria Bartiromo.

The club, which has an 18-hole golf course, had an appraised value of $778 million on June 28, excluding unsold memberships at the club, which are worth another $336 million, according to court papers.

$307 Million Owed

The club owes $307 million on the Credit Suisse loan, according to the bankruptcy filing. Credit Suisse spokesman Duncan King declined to comment on the matter.

Credit Suisse arranged the loan to the Yellowstone Club and sold it to investors. Now, it is acting as the agent for those investors in the bankruptcy proceedings.

Vendors have demanded another $340,342 in late payments for construction projects, and it owes another $20.2 million to other lenders, the club said.

Yellowstone Development LLC, one of the two entities through which Edra Blixseth owns the club, listed assets of $500 million to $1 billion, and debt of less than $500 million in court documents. Yellowstone Development is based in Rancho Mirage, California, where Blixseth lives in a 30,000-square-foot (2,800- square-meter) mansion.

Trouble at the club started in 2005, when club member Greg LeMond, the first American to win the Tour de France, sued Tim Blixseth, alleging that he pocketed $209 million of the Credit Suisse loan as a return of capital to early investors, Tim and Edra being the biggest ones.

LeMond was an early investor in the club and claimed that he was entitled to some of the money. The sides fought in court until this year. In August, Edra paid LeMond and three other investors $8 million and promised to pay another $13.5 million by Nov. 15. That payment is secured by Edra's family compound in the club.

A lawyer for LeMond declined to comment on the matter.

The case is In re Yellowstone Mountain Club LLC, 08-61570, U.S. Bankruptcy Court, District of Montana (Butte).

To contact the reporters on this story: Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net; Anthony Effinger in Portland, Oregon, at aeffinger@bloomberg.net

Last Updated: November 11, 2008 16:44 EST