53 replies to this topic

[CH3skier]

Exclusive Yellowstone Club files for bankruptcy
November 10th, 2008 @ 6:30pm
By MATTHEW BROWN
Associated Press Writer


BILLINGS, Mont. (AP) - A spokesman for the Yellowstone Club says the exclusive resort for the super-rich has filed for bankruptcy after failing to secure financing for an expansion.

The members-only club in Montana's Gallatin Mountains boasts a private ski hill and golf course and counts former Vice President Dan Quayle and Microsoft co-founder Bill Gates among its members.

Spokesman Bill Keegan says the club filed for Chapter 11 protection in federal bankruptcy court on Monday _ just two months after announcing an ambitious expansion plan.

The club recently endured the divorce of its founders, Tim and Edra Blixseth, and a $39.5 million settlement in a lawsuit brought by club member and cycling superstar Greg LeMond.

[Lift Dinosaur]

Just goes to show ya that money doesn't always buy you happiness...good luck to their employees!
(P.S. I know what Chapter 11 means.. been there, done that...)

Dino

[Peter]

I can't say that I'm surprised. The place has been spending money like crazy putting lifts all over the place that don't even operate. I wonder if it owes money to Doppelmayr CTEC like Tamarack did at one point? It will be very interesting to see what happens with this. I think the best thing would be if Boyne bought it and added the terrain to Big Sky. It could be easily added into Big Sky with the 3 connections that already exist. This will probably never happen but it would be awesome and would make it nearly the size of Whistler Blackcomb.

[Tin Woodsman]

Skier, on Nov 10 2008, 10:43 PM, said:

I can't say that I'm surprised. The place has been spending money like crazy putting lifts all over the place that don't even operate. I wonder if it owes money to Doppelmayr CTEC like Tamarack did at one point? It will be very interesting to see what happens with this. I think the best thing would be if Boyne bought it and added the terrain to Big Sky. It could be easily added into Big Sky with the 3 connections that already exist. This will probably never happen but it would be awesome and would make it nearly the size of Whistler Blackcomb.

But then Club Members would have to ski aside the great unwashed!! The horror!!!

[Andoman]

Skier, on Nov 10 2008, 10:43 PM, said:

I can't say that I'm surprised. The place has been spending money like crazy putting lifts all over the place that don't even operate. I wonder if it owes money to Doppelmayr CTEC like Tamarack did at one point? It will be very interesting to see what happens with this. I think the best thing would be if Boyne bought it and added the terrain to Big Sky. It could be easily added into Big Sky with the 3 connections that already exist. This will probably never happen but it would be awesome and would make it nearly the size of Whistler Blackcomb.

I heard Boyne USA is having problems of it's own, at least that's what the people from blue-green reality told me when I looked at some properties up there (this was before the stock market crashed). I've alway enjoyed Boyne Mountain and Highland so I hope this isn't true.

[Peter]

Here's a quote from a 2002 article about the brand new Yellowstone Club: "This is the first job I've had where I don't have to worry about the bottom line,'' he said, adding that once he and Blixseth decide what is best for the ski experience, they do it without regard to cost."

[adam_c_eckhardt]

This doesn't surprise me. I worked there as a ski lift mechanic up until a few months ago. My second to last paycheck was delayed, and one of my tenants (who also works there) had her last check bounce! I guess I got out just in time.

I spoke to a friend who still works there a week ago and he told me that they were siphoning gas out of snowmobiles just to get the work trucks to go another day or two.

good luck to all my friends that work there!

[CH3skier]

Anybody have any ideas on the costs people had to pay to join? Annual fees? I think it might have been included in property purchase but not sure.

[Peter]

Must have $3 million net worth, pay $250,000 entrance fee, $16,000 a year, buy a lot and build a house.

[SkiBachelor]

I don't think there is a fee to join, but to be a member, you had to purchase a home lot and then build a house on it. Annual dues are $16,000.

[Peter]

Tim Blixseth Absent from Yellowstone Club Debacle - For Now

By Jonathan Weber , 11-13-08


It’s an odd twist of fate that the Blixseth who was sitting in the witness chair in a Missoula federal courthouse Wednesday was named Edra. Sure, Edra Blixseth is nominally the owner of the Yellowstone Club, the uber-exclusive resort near Big Sky that’s now mired in bankruptcy. She thus bears much of the responsibility for trying to sort out the mess, even though her equity in the club is almost certainly worthless and lender Credit Suisse effectively controls the property. She’s been involved with the venture from the beginning, and is certainly no business neophyte.

Yet as everyone familiar with the situation knows all too well, the Blixseth who built the Yellowstone Club, the person who persuaded the likes of Bill Gates to join up, the person whose non-stop, on-the-edge deal-making both made the club possible and created its current predicament, is named Tim. His sudden absence from the scene is strange; dozens of lawyers, thousands of pages of legal filings, a financial fiasco of major proportions—and hardly a word about Tim.

Tim Blixseth is out of the picture, at least for the moment, because he agreed to give up his stake in the club as part of the divorce settlement with his wife. Edra testified in court Wednesday that CrossHarbor Capital, a hedge fund that’s angling to get control of the property, actually lent her $35 million, in part to buy out Tim’s interest in the club. The couple had plenty of assets - Tim kept the giant home in Palm Springs with the private 18-hole golf course, among other things - but if Edra actually paid him cash for his stake in Yellowstone Club, it looks like the one-time timber trader once again came out very much on the long end of the deal.

Tim Blixseth assembled the property for the Yellowstone Club through a shrewd land swap with the U.S. government, and he built the concept in part by persuading some high-profile celebrities to sign on early. In the real estate boom times of the late 1990s and early 2000s, it all seemed to make sense: a private ski club for people who wanted privacy and could afford it, with the exclusivity—not just anyone can join!—adding to the allure. Once he got the ball rolling, bankers like Credit Suisse were all-to-eager to get behind it with hundreds of millions of dollars in loans.

But it turned out that even in the boom years, the number of people eager to plunk down millions of dollars for a big house on a small lot at 8,000 feet was limited; the club has sold only 360 of its 864 memberships. Construction costs in Big Sky at the peak of the mountain real estate bubble turned out to be astronomical. And Tim Blixseth, ever the trader, couldn’t resist two things that have played a huge part in the club’s undoing. One was playing it fast and loose with former cycling great Greg LeMond, an early buyer who felt he was conned and filed what turned out to be a highly damaging lawsuit. The club not only had to settle with LeMond for $38 million (the final installment was supposed to be paid this Friday), but the bad publicity came at the worst possible time. The second was developing the Yellowstone Club World concept, which involved buying hugely expensive properties around the world for a type of super-luxury time-share—properties that are now both unrentable and unsaleable.

Lurking behind the blizzard of bankruptcy documents is a basic question: where did all the money go? Surely the $375 million loan from Credit Suisse should have been enough to finish the clubhouse and the golf course and all the other infrastructure, and still leave some in the bank in the event of a real estate downturn. The club’s revenues, after all, depend mainly on the sale of lots and memberships, and you didn’t have to be a seer to understand that the real estate frenzy might not last forever. But the checking account was down to $40,000 by last week.

Tim Blixseth grew up dirt poor, and the only way you go from the bottom of the financial food chain to the top is to bet the house at every opportunity. He’s gone bankrupt once before, and taking big risks is not only not a crime, it earns you respect in some business circles. Man, that guy has a pair! And no one begrudges you all the hugely expensive toys—until, that is, the other peoples’ money that you were responsible for is suddenly all gone.

Even people who expected a real estate downturn weren’t ready for the financial tsunami that’s now sweeping the globe. No one—not Tim or Edra, not Credit Suisse, not CrossHarbor Capital, not the club’s billionaire members—expected to find themselves in a situation where there’s a serious risk that the club will simply go out of business.

That probably won’t happen. But once the dust settles, my bet is the many powerful parties involved will be turning their attention back to the question of how the club got itself into such a mess. And one way or another, Tim Blixseth will have his turn in the witness chair.
________________________________________________________________________________
_________________________________________

Yellowstone Club members revolt over bankruptcy

By Matthew Brown
ASSOCIATED PRESS

11:43 a.m. November 13, 2008

BILLINGS, Mont. – Members of the Yellowstone Club for the ultrarich are opposing another loan to the financially-troubled Montana resort and demanding to know what happened to $463 million in club dues and past loans.

The revolt against the exclusive club's management – by a group claiming to represent more than 100 of its 340 members – comes amid proceedings in the club's bankruptcy case.

New court documents show its debts total at least $399 million, or $56 million more than previously estimated. It has assets of $599 million.

Club co-founder Edra Blixseth is asking a federal judge to approve a $4.45 million loan so the resort can open for the winter season. Attorneys for the Ad Hoc Committee of Yellowstone Club Members say the loan would not fix the club's problems.

[tahoeistruckin]

So maybe Bill Gates and friends can step up and open thier wallets? I'm sure some one in big buisness can afford to use part of thier 700 millon buy out. to buy the YC. I
I'm sure the %ell not getting bailed out.

This post has been edited by tahoeistruckin: 13 November 2008 - 06:09 PM

[SkiBachelor]

I think the Yellowstone Club will actually be bought by its members and turned into a Co-Op. It makes the most sense seeing that they don't want to see all their high valued investments in the club be turned into a public playground.

P.S. I've heard that Tim Blixseth is a con artist from people who have met him. Our neighbor almost did business with the man back in the 80s and couldn't trust the guy after the stories he heard through the grape vine, which actually turned out to be true after investigation.

[Peter]

Yellowstone Club Gets a (Brief) Lease on Life

By Robert Struckman, 11-13-08


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.’”

The judge posed his questions in the second day of emergency hearings in the Chapter 11 bankruptcy case of one of the world’s pre-eminent leisure communities for the mega-rich.

The four companies that operate collectively as the Yellowstone Club filed for bankruptcy 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. The filing comes in the wake of an ugly divorce, allegations of large-scale financial impropriety and the collapse of the high-end real estate market as well as the credit markets that funded it.

Last week, the club’s checking account had only about $40,000, not nearly enough to cover weekly operating expenses such as payroll ($246,000), utilities ($98,000) and other necessities, according to court documents.

“If we don’t have an order today, we’ll have a financial train wreck,” answered James Patten, attorney for Edra Blixseth and the Yellowstone Club.

But without another bailout, the club may wreck anyway, the judge rejoined.

“It certainly isn’t perfect… but it’s what we have,” Patten said.

The idea is that the three-week loan will allow club managers and its creditors to work out a long-term plan to save club.

One underlying question behind the hearing was who would emerge as the owner of the club after the dust settles, and at what price.

Those vying for ownership positions included Credit Suisse, the club’s long-time lender, which is owed about $307 million, and CrossHarbor Capital Partners, a Boston-based hedge fund led by investor and club member Sam Byrne. CrossHarbor negotiated for more than a year to buy the club before the crisis hit, and apparently saw an opening in the wake of the divorce of Tim and Edra Blixseth. According to testimony Wednesday, CrossHarbor loaned some $35 million to Edra to help her buy out ex-husband and founder Tim Blixseth.

CrossHarbor had offered a loan of $18 million to keep the club open until February 13, at which point—in the peak of the ski season—it would presumably have to be sold.

“We’re really in a crunch,” Judge Kirscher said, referring to the club’s lack of cash as well as the hurried pace of the proceedings.

“Either we let this thing go, or I say, ‘No,’ and it ends up being converted by the middle of next week,” Kirscher said. “This may be just deferring the inevitable. I don’t know what else to do with it, to be honest.” (In bankruptcy court parlance, to “convert” it would mean to move form Chapter 11 protection to Chapter 7 - immediate liquidation.)

With that, Kirscher overruled the legal objections of club members and of other parties and said he would sign the order allowing the Credit Suisse loan. He also set the next hearing for Nov. 25 at the federal courthouse in Butte.

At that point, Patten and the lawyer for Credit Suisse anxiously asked Kirscher to immediately sign the order. The club had been operating without cash for a week or more.

“We need to get the money moving as soon as we can,” Patten said. A wire transfer would move the first installment of the loan, first thing Friday morning.

[kstrange3]

Employee meeting on monday I'll let y'all know what they tell us.

[Lift Dinosaur]

kstrange3, on Nov 14 2008, 06:28 PM, said:

Employee meeting on monday I'll let y'all know what they tell us.

Good luck, bro...

Dino

[lastchair_44]

Indeed, best of luck to you!

[skier691]

kstrange3, on Nov 14 2008, 08:28 PM, said:

Employee meeting on monday I'll let y'all know what they tell us.

Kurt, Good Luck Man... I was wondering about ya. Same old at the creek also.

[spunkyskier01]

skier691, on Nov 14 2008, 06:02 PM, said:

Kurt, Good Luck Man... I was wondering about ya. Same old at the creek also.

good luck Kurt. Elliot didn't paint a good picture.

[kstrange3]

Well we're still makin snow so thats a good sign!