Ex-Billionaire Timothy Blixseth Jailed for Contempt of CourtEdvard Pettersson and Anthony Effinger
Timothy Blixseth, the former billionaire owner of the bankrupt Yellowstone Mountain Club LLC, was jailed after failing to account for the proceeds from a resort in Mexico he sold in violation of a court order.
U.S. District Judge Sam Haddon at a hearing today in Butte, Montana, ordered Blixseth to be immediately taken into custody and held until he provides a full of accounting of the $13.8 million he received for the Tamarindo resort. The judge had held Blixseth in contempt in February for selling the property in violation of a bankruptcy judge’s order.
Today’s incarceration is a new low for Blixseth, who once owned the most exclusive ski resort in the world, where Microsoft Corp. founder Bill Gates and other billionaires still ski, play golf and fly fish in pristine rivers.
Yellowstone Mountain Club filed for Chapter 11 bankruptcy in 2008. When its creditors found out that the club had transferred the Mexican resort to Blixseth a year earlier, they got a court order that he couldn’t sell it while the creditors pursued a fraudulent-transfer claim.
Haddon in February told Blixseth to pay at least $13.8 million to the creditors. Blixseth didn’t post a bond for funds or provide the court-ordered accounting, prompting the trustee handling the liquidation of Yellowstone Mountain Club to request on Dec. 5 that he be jailed.
“Blixseth’s blatant violation of the injunction, together with his tortuous history of fraud, litigiousness, contempt, and repeated refusal to account fully and openly for any of the cash or other property he has absconded with over the years, suggest that Blixseth is highly unlikely ever to comply voluntarily with the provisions of the contempt order requiring him to account for the proceeds of sale,” according to the trustee’s filing.
Michael Ferrigno, a lawyer for Blixseth, didn’t immediately respond to phone and e-mail messages seeking comment on today’s ruling.
Blixseth said in a Dec. 5 court declaration that until recently he hadn’t been able to locate the accountant for the Mexican resort and find out what the closing costs of the sale were. He also said that he couldn’t post the $13.8 million bond because he doesn’t have the money.
“I am still unable to meet the court’s demands concerning the bond as my financial situation has only worsened,” Blixseth said. “I have regrettably lost the ability to put on a spirited and likely meritorious defense.”
The Yellowstone Club is now owned by Crossharbor Capital Partners LLC, a private equity firm in Boston run by club member Sam Byrne.
Blixseth’s troubles started after he negotiated a $375 million loan from Credit Suisse Group AG in 2005. For years afterward, Blixseth and his then-wife, Edra, lived in a mansion in Palm Springs, California, surrounded by an 18-hole golf course and traveled the world in Gulfstream jets.
He started a company called Yellowstone Club World that bought property around the globe, including a castle in France, a 30,000-square-foot mansion on a private island in Turks and Caicos, and two yachts, named Piano Bar and Tooth Fairy. He also bought Tamarindo, a golf resort on the Pacific coast of Mexico.
The Blixseths’ expensive tastes were on display at the Yellowstone Club’s lodge, which was furnished with antique furniture and lavish art. Assets listed in the club’s 2008 bankruptcy filing included a bronze bison ($8,260); a carved Louis XV buffet ($29,395); a Steinway piano ($13,399); and an “upright bear” ($13,708).
Cyclist Greg LeMond, a club investor, sued in 2006 over claims that Tim and Edra Blixseth took $209 million of the Credit Suisse loan for themselves as a dividend. A little more than a year later, the U.S. real estate market collapsed, and sales of property at the club plummeted. The club declared bankruptcy in November 2008, and Blixseth has been fighting in court over the matter since then.
“We take no pleasure in the fact that he’s been incarcerated,” Brian Glasser, the trustee of the Yellowstone Club Liquidating Trust, said in an interview. “But we don’t understand his choices. He’s chosen not to pay his lawful debts. He’s chosen not to provide an accounting of the Tamarindo sale.”
The case is Glasser v. Blixseth, 13-cv-00068, U.S. District Court, District of Montana (Butte).
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Avicii, DJ-Producer Who Performed Around the World, Dies
- Deutsche Bank's Bad News Gets Worse With $35 Billion Flub
- Southwest Airlines Gives $5,000 to Passengers on Fatal Flight
- Wells Fargo's $1 Billion Pact Gives U.S. Power to Fire Managers
- Oil Shrugs Off Trump Tweet to Rise for a Second Straight Week