[Vision2020] Former Timber Baron Blixseth Goes on Trial

Tom Hansen thansen at moscow.com
Wed Feb 24 08:08:59 PST 2010


Courtesy of today's (February 24, 2010) Lewiston Tribune.

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Yellowstone Club founder goes on trial
Creditors' attorney claims exclusive Montana resort was 'looted'
By Matthew Brown of the Associated Press
February 24, 2010

BILLINGS, Mont. - The founder of the millionaires-only Yellowstone Club
goes on trial today to face claims that he fleeced the private ski resort
out of at least $286 million.

Before its 2008 bankruptcy filing, the Montana club gained a reputation as
an alpine haven for the nation's elite. Its membership list includes
Microsoft Corp. co-founder Bill Gates, hotel magnate Barry Sternlicht and
former Vice President Dan Quayle.

The club came out of bankruptcy protection last year, but creditors are
still chasing former owner Tim Blixseth in federal court.

They want a civil fraud judgment against the real estate tycoon and former
timber baron, who used a loan ostensibly for the club to bankroll a gilded
lifestyle of luxury jets, fleets of cars and international estates.

"His conduct can only be described as looting, and he should be held
accountable for his actions," creditors' attorney Charles Hingle wrote in
court documents.

A three-day trial is set to begin today before U.S. Bankruptcy Judge Ralph
Kirscher in Missoula.

Blixseth, 59, claims the club's debts were transferred to his former wife,
Edra, when she got the 13,600-acre resort in their divorce settlement. He
said that ended his obligations on the $375 million loan, which Credit
Suisse arranged in 2005.

"She knew it and acknowledged it," he said Tuesday. "I got waivers,
releases."
Edra Blixseth is in personal bankruptcy. She sold the club last year for
$115 million to Sam Byrne of Boston-based CrossHarbor Capital Partners.

Under court order, she's had to give up multiple homes and most of her
jewelry and other possessions. Her main residence - Porcupine Creek, a
25,000-square-foot mansion with its own golf course in Rancho Mirage,
Calif. - was recently put on the market for $75 million.

She has blamed her former husband for the club's problems, starting with
the 2005 loan.

Tim Blixseth, too, has been trying to shed property, including a small
private island in the Turks and Caicos. The asking price was recently cut
from $75 million to $48.5 million. Blixseth denied the sale was prompted
by his court troubles.

Until two years ago, Tim Blixseth was listed on Forbes magazine's list of
the 400 richest Americans, with an estimated fortune of $1.3 billion. He's
no longer on the list and in an interview declined to estimate his worth.
Like many in the high-end real estate market, he said he's been forced to
"hunker down" since the recession and tone down his lifestyle.

He maintains his economic moves at the Yellowstone Club were the right
ones - that it was thriving with $50 million in pending sales before the
August 2008 divorce. Yet he also blames Credit Suisse for arranging a
"predatory loan" he couldn't have been expected to repay.

Three months after Blixseth severed ties with the club, the resort was
$400 million in debt.

Newly disclosed billing records from one of Blixseth's attorneys show he
was contemplating the club's bankruptcy months before his wife took over.

By that time, he also was setting up a Nevada partnership, Desert Ranch
LLP, with his son, Beau, to hold property and other assets acquired
through the 2005 loan. Desert Ranch received at least $245 million in
assets, according to court documents.

The trustee for the club's creditors, Marc Kirschner, contends Blixseth
had seen the bankruptcy coming and set up a scheme to protect his money
from creditors.

Blixseth said he was estate planning and the club's bankruptcy was
discussed only as one of several future scenarios.

Blixseth is now remarried and lives in Seattle. Through the Nevada
partnership, he also owns a ranch near Cody, Wyo., a $40 million resort in
Mexico and the island in the Turks and Caicos.

If the bankruptcy judge rules against him, those assets could be used to
pay off the club's remaining debts, including the Credit Suisse loan.

----------------------------------------------------

Blixseth?  Tim Blixseth?

Now, where have I heard that name before?

Oh, yes!

Extracted from the March 31, 2009 edition of the MOscow-Pullman daily News.

"There's a reason why a company owned by timber magnate Tim Blixseth wants
to swap 39,000 acres of privately held property for 28,000 acres of
federal land.

Actually, there are millions of them - both in board feet and dollars.

The Western Pacific Timber Co. has proposed the so-called Upper Lochsa
Land Exchange, which would trade a logged-over chunk of property for a
pristine portion of the Clearwater National Forest, some of which extends
into Latah County."

Maybe I have Mr. Blixseth all wrong.  Maybe he is merely a poor neglected,
billionaire con-artist trying to simply eek out a living.

Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho

"The Pessimist complains about the wind, the Optimist expects it to change
and the Realist adjusts his sails."

- Unknown




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