The Tour de France might come to seem less grueling -- and certainly less murky -- than Greg LeMond's two-year legal fight against the Yellowstone Club, which he resumed this week when he asked a Montana judge to order club owner Edra Blixseth to pay him the final $13.5 million of a $21.5 million settlement, a Bloomberg story says.

The judge granted LeMond's request, but the cycling great, who won the world's top cycling race in 1986, 1989 and 1990, will have to get in line for his money. The Yellowstone Club, which Edra Blixseth only won control of in August after a long and bitter public divorce with former timber executive Tim, filed for Chapter 11 bankruptcy on Nov. 10.

In her filing in U.S. Bankruptcy Court in Butte, Montana, Blixseth tallied the club's debts at about $350 million. The biggest liability is $307 million, not including interest, to Credit Suisse Group. The Zurich-based bank loaned the club $375 million in 2005. 

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By Robert Struckman, 11-21-08 | add comment | email story | print story

Tales From Bankruptcy Court

A Montana bankruptcy judge reluctantly breathed three weeks of life into the Yellowstone Club in a Missoula courtroom Thursday when he OK'd a three-week loan to keep the club operating during the next stage of bankruptcy hearings.

"Why am I doing this?" asked U.S. Bankruptcy Court Judge Ralph B. Kirscher, who called it "troubling" and "overkill" that his order included the terms and conditions of a $4.4 million temporary bailout loan from lender Credit Suisse to the luxurious-but-broke private club.

"What happens if I don't sign this order?" Kirscher said. "If you would have asked me at one o'clock last night, I would have said, 'This isn't going to get signed. I'll let things fall where they may.'" 

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Poor Little Rich Club

Once touted as the world's pre-eminent leisure community for the mega-rich, with billionaires from Bill Gates on down among its members, the Yellowstone Club near Big Sky, Montana, doesn’t have enough cash in the bank to buy propane, owner Edra Blixseth said in bankruptcy court in Missoula Wednesday.

The four companies that operate collectively as the Yellowstone Club filed for Chapter 11 bankruptcy protection in Montana on Monday, citing debts of about $360 million, most of it owed to a consortium of lenders led by international bank Credit Suisse. Chapter 11 allows a business to operate while it reorganizes its debt, and in this case the bankruptcy filing comes in the wake of an ugly divorce, allegations of large-scale financial impropriety, and a complete meltdown of the high-end real estate market and the credit markets that funded it.

The club doesn't have enough cash to make its $600,000 monthly payroll for its 521 employees or to buy food for its restaurants, or for the electricity needed to operate the chairlifts at its storied private ski area. Last week, the club's checking account had only about $40,000.

 

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News Brief

The proposed Bitterroot Resort passed an early hurdle from the Bitterroot National Forest on Monday.

"We passed our first screening," said manager Jim Gill. "This is just one of many steps."

The Bitterroot Resort seeks to develop as part of its four-season resort 3,000 acres of Forest Service land (down from the 12,000 originally requested in 2005) for gladed skiing, Nordic skiing, and mountain biking, none of which would require ski lifts to access.  

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The Yellowstone Club near Bozeman teeters on the brink of closure and lacks the cash to make payroll for 521 employees for the next three weeks, if a Montana bankruptcy judge doesn't allow the company to take on another $4.5 million in debt and spend its cash collateral, according to a plea filed in the resort's bankruptcy case.

The uber-exclusive, 13,600-acre Yellowstone Club filed for Chapter 11 bankruptcy protection late Monday, citing a total of $344 million in debt, mostly to international bank Credit Suisse, and about $1.1 billion in assets, court filings say.

A special request filed alongside the initial bankruptcy papers asked U.S. Bankruptcy Judge Ralph B. Kirscher to OK an immediate hearing in the case to decide whether the club could use its cash collateral and to take out the loan. 

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Tough Times at the Club

Late Monday the uber-exclusive Yellowstone Club near Bozeman filed for Chapter 11 bankruptcy protection after negotiations broke down with lender Credit Suisse, from whom it borrowed some $300 million several years ago.

The first court filings, which bear the signature of club manager and co-owner Edra Blixseth, cite a combined debt of $344 million and assets of about $1.1 billion. The bankrupt companies include Yellowstone Mountain Club, Yellowstone Development, Big Sky Ridge, and Yellowstone Club Construction Co, according to court documents.

"I think we had a perfect storm. We're in a tough liquidity position," said club spokesman Bill Keegan. "We were seeking new long-term financing as part of our long-term capital needs, and then the lending markets froze. We felt it was best to protect the club, the members, and our future by seeking Chapter 11 protection."
 

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