Emerging from Bankruptcy
Yellowstone Club Sale Gains Final Approval
A highly contentious bankruptcy court battle comes to an end as Judge Ralph B. Kirscher formally approves a reorganization plan and sale of the posh club.By Jonathan Weber, 6-01-09
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Brushing aside a spate of last-minute objections, U.S. Bankruptcy Court Judge Ralph B. Kirscher on Monday approved the reorganization plan for the bankrupt Yellowstone Club, clearing the way for the property to be sold to Boston-based CrossHarbor Capital Partners.
Confirmation of the reorganization plan and the accompanying sale of the club were all but assured after a negotiated settlement was reached two weeks ago with investment bank Credit Suisse, which brokered a $375 million loan to the club in 2005 and now represents the entities that hold the remaining $310 million of debt. But former club owner Tim Blixseth and manager Bob Sumpter continued to object to the plan, and a late objection to the settlement agreement emerged from Highland Capital, which was the manager of the loan funds that included the Yellowstone Club loans.
Highland’s objections had to to with a matter that is often important in these kinds of agreements - the “releases” in which everyone agrees not to sue one another. Highland was apparently seeking to retain the right to take legal action against Credit Suisse, whose behavior in making the loan was harshly criticized by Judge Kirscher in a ruling which put the Credit Suisse lender groups claims at the back of the line. But Kirscher denied all the objections after a relatively brief hearing Monday.
CrossHarbor, a real estate investment firm led by Sam Byrne, will now acquire the club for $115 million in cash and debt, and commit to investing up to $75 million going forward. All unsecured trade creditors should be paid in full under the plan. The Credit Suisse lender group will get a new $80 million note, and may be able to recover additional funds from the sale of the Chateau de Farcheville in France and from legal claims against Tim Blixseth.
For background, click here for archives of the Yellowstone Club coverage or see related stories below:
CrossHarbor Wins Battle for Yellowstone Club
Citing “Naked Greed,” Judge Eviscerates Credit Suisse in Yellowstone Club Case
Yellowstone Club: How to Go Broke on $375 Million
Tim Blixseth Defends Yellowstone Club Deals
The Case Against Edra Blixseth
Yellowstone Club: Tim Blixseth, Credit Suisse on Trial
Bankers on Trial: Credit Suisse, the Yellowstone Club, and the Real Estate Collapse
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Comments
now CS having recourse against TB and crew -that is where it will get interesting.
How exactly does one make money on $200m plus the Sunrise train wreck, when NO ONE IS BUYING LOTS? I suppose they could sell PC for more than the $35m they took it for, but still...NO ONE IS BUYING LOTS.
Maybe SB will just GIVE Nancy and us other locals the $75m, so we can BUY lots. Then it all works out. Yeah, that would work.
since they were able to sell several lots/houses this winter while the club was in bankruptcy, it would seem reasonable to expect that after two or three years they would have worked off the backlog of spec houses, condos, etc. even if the price drops by 50% at Sunrise Ridge, the developer will make money, as your inside knowledge of all things YC would probably have told you.
suck it up, go have another burrito, and by all means don't participate in any of the positive things that are going to happen in Big Sky.
As a member of one of Mike Meldman's clubs, where Edra is a member with her boyfirned Jack scalia; I am supprised that no one seems to see the connection between Sam Bryne, Mike Meldman and Edra. It is not too hard to see the scheme worked to get the club for very little!
Discovery with its LA connections is chomping at the bit to get its commissions on the sale of any real estate, once they get rid of the sales team there now. Watch out for the on site parties; girls brought in and liquor flowing.
Does anybody know more about this? Is the YC going to turn into Hollywood in the Rockies?
a. DLC doesn't replace the existing sales team - what they sell in other parts of the country isn't the same as what they will be selling at YC. and the YC team has not been the problem. TB has been the problem.
b. DLC does throw some nice parties...that is probably not a crime. the reality is that the YC crowd really isn't terribly glitzy. lots of famous people have visited YC in the past and i don't think it was because TB didn't like hanging out with movie stars that the club isn't full of them - its because NO ONE CARES who they are up there and the star crowd needs to feel "special" wherever they are. plus i don't think Cross Harbor will be in the mood to offer lots of "freebies" to the crowd that is used to getting them.
c. YC is remote - Sun Valley also had the party set, but once the initial buzz wore off, the hollywood set who just wanted the "scene" found it too difficult to get to, nothing to do, blah blah blah...Hard for the "beautiful people" to get all geared up to come hang in Big Sky unless they are really there for the skiing, hiking, golf, etc.
i am sure there will be some good parties - but i don't think that is anything new at YC.
This means her assets get shifted to the control of a court-appointed trustee, who can liquidate her possessions and give the proceeds to creditors.
According to the Wall Street Journal, Acting U.S. Trustee Robert D. Miller Jr. ordered the shift because she was unresponsive to "repeated requests" to show that her assets were insured.
Woe...hide the Piagets and tiaras...
Just curious?