HELENA, Mont.—Former Yellowstone Club owner Tim Blixseth has asked a federal bankruptcy judge to declare that Blixseth’s actions while operating the club were legal and proper.Blixseth gave up ownership of the Yellowstone Club last August after a contentious divorce proceeding that left his ex-wife, Edra, in charge of the upscale resort.
He filed the lawsuit March 24, naming as defendants the club and a committee representing unsecured creditors.
It came in response to a suit filed earlier this month on behalf of Yellowstone Club creditors who allege the Blixseths engaged in “fraudulent transfer” when they borrowed $375 million in 2005 from the international financial services group Credit Suisse.
Tim Blixseth’s countersuit called the creditors’ complaint “an assertion of stale claims based on inaccurate and incomplete facts.”
The creditors allege the loan financed the Blixseths’ personal interests and a worldwide timeshare venture. According to the suit, nearly $12 million was used to finance the Blixseths’ home in Rancho Mirage, Calif., $28 million to purchase a castle in France and $3.5 million for private airplanes.
The creditors’ suite alleges those expenditures violated an operating agreement between members and the club, which stipulates financial allocations are to be distributed among resort members based on percentage ownership.
The creditors want to be compensated for the Blixseths’ alleged breach of contract and fiduciary duty, according to the suit filed on March 3.
Blixseth counters in his lawsuit that the loan proceeds allowed the club to pay off existing debt while financing future construction and development.
“Under Mr. Blixseth’s management, the Club repeatedly profited from the sale of real estate and achieved positive net income,” the lawsuit states.
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Information from: Billings Gazette
