Billionaire's Bankruptcy

Judge orders former real estate mogul to pay ­creditors $286M

By Matthew Brown
Associated Press

BILLINGS, Mont. (AP) - A U.S. judge has ordered a former luxury real estate mogul to pay $286 million to the creditors of a Montana club for the ultrarich that he is accused of fleecing for personal gain before driving it into bankruptcy.

The order Wednesday from U.S. Bankruptcy Judge Ralph Kirscher is the latest turn in a years-long hunt for assets of Timothy Blixseth, the founder of the Yellowstone Club, a private ski and golf resort near Big Sky with an elite group of members including Microsoft co-founder Bill Gates.

Blixseth diverted hundreds of millions of dollars from a 2005 Credit Suisse loan to the club, using the money to buy jets, yachts and luxury properties around the globe. His ex-wife received the club as part of their divorce settlement in 2008 and it went bankrupt within months after its huge liabilities were uncovered. The club later emerged from bankruptcy under new ownership.

Blixseth said Thursday via email that he had no comment on the $286 million judgment. He is now representing himself in the case and said in a court filing last week that blame for the club's bankruptcy should be shared by Credit Suisse, which he claimed unfairly enticed him into accepting a reckless loan.

Kirscher agreed with that claim in 2010, when he issued a reduced, $41 million judgment against Blixseth. But the Ninth Circuit Court of Appeals reversed that ruling in July, saying Credit Suisse's wrongdoing paled against Blixseth's and he should have to relinquish his "ill-gotten gains."

Credit Suisse spokeswoman Nahema Patwari declined immediate comment Thursday.

Trustees for the club's creditors have recovered only $141.07 from Blixseth despite a string of multi-million judgments against him in courts in Montana and California.

During a trial scheduled to begin next week in U.S. District Court in Seattle, Washington, attorneys for the creditors will try to prove that Blixseth tried to shield his assets by turning them over to his wife and mother-in-law. That case involves the sale of a jet, two yachts and a mansion in Medina, Washington.

"If we prevail on everything it's $13.1 million plus interest," said Yellowstone Club Liquidating Trustee Brian Glasser, a West Virginia attorney who represents the club's remaining creditors.

Blixseth in July was released from more than a year in jail for defying court orders to reveal his assets. He now lists his address as Palm Desert, California.

Blixseth told the court that he is no longer able to pay his attorneys and they have withdrawn from the case.

Published: Fri, Sep 30, 2016