Bankruptcy Court, or Divorce Court?
Yellowstone Club Chronicles: Edra Forced to Liquidate, Tim Launches PR Campaign
Edra Blixseth faces financial ruin, and Tim Blixseth is now on the offensive. He tells NewWest.Net he'll honor a $1 million commitment to the new high school in Big Sky.By Jonathan Weber , 6-17-09
Tim Blixseth leaving the Missoula courthouse last month. Photo by Daniel Doherty.
The scene in U.S. Bankruptcy Court in Butte on Tuesday, where a hearing was held on former Yellowstone Club owner Edra Blixseth’s last-ditch effort to keep control of her disastrous financial situation, was more poignant than dramatic. Edra, looking downtrodden, spent most of the day in the witness chair, trying to explain how and why she had messed up her bankruptcy case by failing to maintain insurance on her assets and filing important court documents late and incomplete.
Meanwhile, in the back corner of the Beaux Arts courtroom - which was packed during the Yellowstone Club bankruptcy proceedings but on this day was mostly empty - sat her ex-husband Tim, accompanied by his son Beau and his new wife Jessica, ready to drive more nails into Edra’s coffin.
In the event, Tim Blixseth’s presence, and the colorful but harsh 26-page affidavit he filed last week outlining his ex’s alleged bad behavior, were academic, at least for this proceeding. The court had already converted Edra’s Chapter 11 bankruptcy filing, in which she would get the chance to reorganize her own affairs, into a Chapter 7, a forced liquidation overseen by a U.S. Trustee. Tuesday’s hearing (which I was able to attend only briefly) was her chance to argue that the decision should be reversed. But it seemed like a long shot, and indeed U.S. Bankruptcy Court Judge Ralph B. Kirscher denied the motion, setting the stage for a fire sale of the Porcupine Creek estate and Edra’s numerous other properties at the Yellowstone Club and elsewhere.
Tim Blixseth’s court filing, though, was about more than his ex-wife’s bankruptcy. The Yellowstone Club founder argues that the whole financial debacle that enveloped the club last year, and resulted in the club’s bankruptcy filing and the eventual sale of the property to CrossHarbor Capital Partners, was Edra’s fault. He’s now hired a public relations firm to help him make the case - which, as we’ll see in a minute, remains a very high-stakes affair.
The investment in media relations is already bearing fruit. A story Wednesday on the ABC News website, in addition to citing flattering quotes from a 2007 20/20 interview with Tim, concluded with this passage:
“A spokesman for Tim Blixseth told ABC News that since his 2007 interview with 20/20, “he turned over the exclusive Yellowstone Club resort to his ex-wife as part of their divorce Agreement. She promptly drove it into bankruptcy, and then also declared personal bankruptcy. Tim is hopeful that the bankruptcy judge sitting in Montana will agree...to bring in an unbiased trustee to liquidate her assets, so all her creditors start getting paid.”
Blixseth has remained involved in a host of charities and is “grateful for all of life’s blessings, especially now during the worst financial crisis in our lifetime, when so many Americans are struggling.”
Edra’s attorneys did not respond to requests for comment.”
The idea that Edra “drove [the club] into bankruptcy” is at the heart of the defense Tim hopes to make in the various legal proceedings against him. He’s being sued by the club and the club’s unsecured creditors’ committee for fraudulent transfer and breach of fiduciary duty for borrowing $375 million from a Credit Suisse-led group, using more than $200 million of it for his own purposes, and failing to share the proceeds with minority shareholders. The trial in that proceeding will resume this fall, and Blixseth will likely try to assert the defense that the club’s financial collapse was not caused by the loan or how it was used, but rather by Edra Blixseth’s irresponsible ways, and in particular a supposed scheme with CrossHarbor’s Sam Byrne to scotch a planned sale of the club and force it into bankruptcy so it could be bought on the cheap.
Tim also faces possible legal action from the “liquidating trust” that has been established as part of the club’s bankruptcy reorganization. In particular, Credit Suisse has a strong financial incentive to pursue claims against him via the liquidating trust. And if Edra can come up with the money to hire the lawyers, she is likely to sue him over their August, 2008 Marital Settlement Agreement, in which she got the club and all the debts, as well as Porcupine Creek, and he got valuable assets including resorts in Mexico and Turks and Caicos.
Edra’s situation, portrayed nicely by my friend Amy Wallace in a New York Times story this weekend, is strange, and sad in its way. She’s flat broke, but still lives at the 240-acre Porcupine Creek property near Palm Springs. She feels good about having helped resolve the Yellowstone Club bankruptcy (which in truth was all but inevitable many months before she gained ownership of the club), but seems not to have acknowledged fully that her jet-setting lifestyle is over. She admits her mistakes and bad judgments, but then again, saying you’re sorry isn’t always enough.
In an email to this reporter Wednesday, she said: “I am of course, disappointed with the judges ruling. We had a very good plan in place to work through a Chapter 11 for the benefit of those that deserve to be paid and will now work hard with the UST [U.S. Trustee] to continue to maximize the value of the assets.
“It was disheartening that the two “creditors” that launched the protest of the reconversation were my ex-husband, Tim Blixseth, who clearly did it for continued personal vindictive reasons, having nothing to do with the best interest of my creditors. The other, Western Capital Partners, who have been working in tandem with Tim’s efforts, and have continued on the scorched earth tactics against me they have been using for months. They are secured with assets through my sons Chapter 7… This will not stop me from working hard, however, to help the UST for the benefit of those that deserve to be paid...”
Tim, meanwhile, appears to have plenty of cash, and seems determined to rehabilitate his tarnished image. A story in the Bozeman Daily Chronicle this week discussed the problems that had arisen for the new high school in Big Sky as a result of Blixseth’s failure to honor a promised $1 million donation (he has paid just $100,000 of it). In an email Wednesday, he said:
“The original pledge was intended to come from the YC Dream Catcher foundation. Since Edra took control of YC and [has] now lost control, the pledge will either go away or I will step up and take the place of the Dream Catcher foundation. We have all been thru a financial “heart attack” in the real estate business but there are signs of life showing since the new administration has taken over. Bottom line, I will step up and honor that balance of the commitment either personally or thru one of our companies in the coming few months.”
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Anybody ever work (as a contractor) for Tim? Being associated with the firm that built Yellowstone Club, I can assure you that timely payment is a term Mr. Blixseth has never comprehended...and now we are to believe that he is concerned about creditors being paid?
I'd laugh, except the memory of chasing Mr. Blixseth on a monthly basis for payment (typically, 1-2 million) is still too painful.
That guy is Mr. Teflon.
I think Tim will have to spend a further 100 million PR plus, say, a Turks island before he is elevated to bottom feeding low-life status.
Nice of Tim to think he can grovel back into favor but his hollow vapor bid won't be forgotten. Tim crawl back under your rock or at least change your name before you try to fool people again.
Tim Blixseth=Ruthless Rake (call it like it is, Blockhead)
He knew all kinds of details that only an insider would know while Tim owned it, was unemployed as soon as Edra owned it, despised Edra, and seemed to be in the know of all of Tim's actions and took his side after the fact....anyone care to confirm/ deny?
But now you want to cry about it? How come it's the Blixseths fault that the loans cant be repaid, but the rest of you get to blame someone else? Is it the Blixseths, or Credit Suisse, or the mortgage companies, or China, or Bush, or, just maybe, you all need to take some personal responsibility for your own gluttony.
No, I was on no particular side, but got sick of reading about the whining locals who want to always blame the guy with the money.
Not to whine but I drive a Dodge, don't see too many of us local whiners driving Fords, they are a pain in the ass to work on. But like you said, you are probably from Palm Springs. Not fighting over who owns the Land Rover are you?
"How come it's the Blixseths fault that the loans cant be repaid, but the rest of you get to blame someone else?"
Maybe they are blaming the Blixseth's because they, the "whiners", had not been paid......what is so wrong with wanting someone to stick to their word/ contract?
Crappy condos in Big Sky and King Ranches gluttonous? I beg that in the grand scheme of things, in comparison to the nefarious actions that led to the demise of the club and pending lawsuits, overpriced cardboard condos and utility vehicles can hardly be called gluttonous.......
just my thoughts
I am quite surprised no enterprising journalist has taken on the task of biography and forensic financial discovery from the public record of the Flim Flam Man....I once worked for a guy never failed to pay me, but always found a way not to pay suppliers, friends who loaned money, and capital loaners. Sweet talking guy, with a grandiose sense of himself, shooting for the moon and never breaking out of the atmosphere of local financial disgrace. That is who those guys are. Blixeth is a trail of deals gone bad, sooner or later. A leopard that has never changed spots. And, a teflon sense of responsibility, duty, and public morality. Nothing sticks.
So, the issue is the first time it is shame on Timmy. The second time it is shame on whoever he has scammed. There is no, zero, reason for anyone to ever buy into a Blixeth deal, unless they are totally greed driven.
Tim B. bought an exclusive property a few miles south of teh Cody WY airport, commonly called " Monster Lake" , to develop as one of the ritzy glitzy gated clubs in his YellowstoneWorld plan. The $ 3 million Monster Lake " ranch" was formerly owned by the Mormon Church's Deseret Ranches holding company, and briefly by another fallen investor type, Russ Frazier who started Fitch Bond Rating Services ( yes, the same Fitch indicted in the mortgage default scandal alongside Moody's et al ). Frazier declared bankruptcy and Blixseth snapped up Monster Lake to develop into a sandstone and cedar ridge luxury development like the Yellowstone CLub , only with awesome Rainbow trout fishing instead of private skiing. The rainbows in that lake are the size of King Salmon , or bigger. That sale occured in 2006. Tim Blixseth is the only name on the Park County WY assessor's tax description...not Edra, no Yellowstone Club...nada. Just Tim.
To the point: our county Treasurer is publishing this week ( July 15) by law the list of delinquent property taxpayers. Tim Blixseth is on that list this time around.
By the way , the same treasurer told me that in all the years she's held the office ( she's in her 3rd term now), the number of delinquent taxpayers in Park County has never gone much north of 200. This year it is 440...... yikes !
I dunno ... was Tim Blixseth spotted at any of the Tea Parties? Tax protestor type ?
Voodoo dolls, prayer rooms--it all makes perfectly good sense now--Tim and Edra Blixseth ARE certified NUTS! Makes you wonder
about the "uber-elite" and the people they keep company with.