For Carl...

[JayB]

"VIRGINIA CITY n The Yellowstone Club is “languishing in a liquidity crisis” and on the verge of bankruptcy, according to Edra Blixseth, who is in court this week trying to have her estranged husband, Tim Blixseth, removed as the club’s manager and banned from its offices.

 

 

She also is asking that she be reinstated as the club’s chief operating officer.

 

“It’s completely baseless,” Tim Blixseth said here Monday, in a room packed with 12 lawyers. He said the legal move by his wife of 25 years is an “attempt to circumvent the family court process in California,” where the couple is locked in a bitter divorce proceeding.

 

“It’s an end-run attempt on her part,” he said.

 

It’s no secret that the club has been having some troubles lately.

 

* It missed a deadline to pay a $20 million settlement and a deal to sell the club to a Boston investor fell through last week.

 

Edra Blixseth maintains the problems are much bigger than that.

 

Tim Blixseth “has not been managing the Yellowstone Club for at least the past year and the club has no cash to operate and appears to be insolvent,” she said in court papers. “There is no competent evidence that (Tim) Blixseth has raised or can raise sufficient cash to solve the crisis and stabilize the club without effecting ‘fire sale’ lot sales. He has also lost the confidence of the club’s creditors and employees.”

 

Bob Sumpter, vice president of real estate development at the club, denied all of those assertions during testimony Monday.

 

He agreed that payment had been delayed for a number of local vendors, but that they had been paid over the weekend after a $15 million land sale closed last week. That debt amounted to roughly $7 million, he said later, and the late payments came with interest.

 

He said Tim Blixseth has been an able manager and that he’d always been able to reach him with questions.

 

After settling its bills, the club has $4.6 million in the bank, he said, adding that it sold $95 million or $96 million worth of real estate last year and $30 million to $35 million worth so far this year.

 

Timely payments are being made on a $375 million loan from international financier Credit Suisse, he said, and the principal owed on that loan is now about $306 million.

 

However, some of those sales are being made from the club to other companies related to Tim Blixseth. One company, called Overlook Partners, made the $15 million purchase last week and another is poised to pay approximately $56 million for a large parcel near the resort’s ski base in a couple months, Sumpter said. That property eventually will contain luxury condominiums, he added.

 

Cash from those sales will be used to fund the club’s operations, he said, and sales are taking place at market values.

 

“We sell property,” Sumpter said. “That’s what we do.”

 

Edra Blixseth’s lawyer, Deborah Klar, who also represents her in the divorce, maintained that Tim Blixseth has been using the club’s assets to buy expensive properties in other countries for his “Yellowstone Club World,” a set of exotic hotels and resorts, plus jets and yachts.

 

“Assets are being drained from The Yellowstone Club to pay for Yellowstone Club World,” she told Judge Loren Tucker. “Much of the information being presented here is being cherry picked.”

 

The club’s obligations far exceed the $4.6 million of cash on hand, she said.

 

The couple disagrees over who owns the larger share of the club. A company called Blixseth Family Investments, which Edra Blixseth controls, owns 4.8 percent of the club. But she maintains she also owns half the shares in Blixseth Group, Inc., which belongs to her and Tim Blixseth, which owns 82 percent of the shares.

 

Those shares haven’t been allocated, Tim Blixseth said in an interview. The California court could decide to award her cash instead of shares. He said she owns only 4.8 percent of the club’s shares at this point.

 

Edra Blixseth presented to the court an affidavit from J. Gary Peters, chief executive officer of 1800 Investment Group, offering a capital infusion of $50 million, but only if Tim Blixseth is removed from management.

 

That money would allow the club to pay Greg LeMond and other minority investors the $20 million the club owes them and has agreed to pay them, Edra Blixseth said in her legal filing.

 

“The Yellowstone Club will suffer irreparable harm unless (Edra) Blixseth is reinstated as the club’s chief operating officer and allowed to stabilize the club’s business,” she said in court papers.

 

Through the family investment company, she is trying to intervene in LeMond’s lawsuit, even though she is also listed as a plaintiff in that suit.

 

LeMond’s lawyer, Jim Goetz of Bozeman, said he neither opposes nor supports the attempt at intervention.

 

“We just want to get paid,” he said.

 

The hearing continues Thursday, but Tucker said he is moving the proceedings to Dillon."

 

http://bozemandailychronicle.com/articles/2008/04/08/news/10blixseth.txt

[billcoe]

I thought this was old news about the divorce and the clubs money troubles. Tim Blixseth is a pretty amazing guy. Deep respect for the McDougals too, especially Norm.

[Hugh Conway]

Hehe. Wonder how long they last on their own? They, Moonlight Basin and Big Sky could linkup for a megaresort.

 

Now if only Alpine and Squaw will stop squabbling, buyout the dude with the lift, and linkup as well.