Montana Ex-billionaire must appear in bankruptcy court

By Matthew Brown Associated Press BUTTE, Mont. (AP) - A one-time billionaire real estate mogul who's been hounded by creditors over his role in the bankruptcy of an ultra-posh Montana resort could be forced to answer questions in federal court on Monday about the whereabouts of his fortune. U.S. Bankruptcy Judge Ralph Kirscher ordered Yellowstone Club founder Tim Blixseth to appear in person for the hearing in Butte. The proceedings could reveal what happened to more than $200 million that Blixseth diverted from the members-only ski and golf club for his personal use. A trustee for the club's creditors wants to get Blixseth under oath to answer questions about his finances. Blixseth was estimated by Forbes to be worth $1.3 billion prior to the Yellowstone Club's 2008 bankruptcy, with properties in Montana, Mexico, California, Wyoming, Washington state and elsewhere. His attorneys say that fortune is now gone, burned up by legal fees, divorce and the economic downturn. "Mr. Blixseth is a great business guy and I have no doubt he'll rebound, but ... his assets have been dissipated and devalued and had to be sold," said Blixseth attorney Philip Stillman. But Blixseth's creditors aren't buying it, and say he's hiding assets to avoid paying two outstanding civil fraud judgments against him that total $241 million. "I don't believe him, not for a minute," creditors' trustee Brian Glasser said. "We're going to try to figure out where everything is and where everything went." So far, the creditors' trustee has managed to collect only $141.07 from Blixseth, Glasser said. The 13,600-acre Yellowstone Club, near Big Sky, Montana, attracted the likes of Bill Gates and former Vice President Dan Quayle after Blixseth and his then-wife created it more than a decade ago. In 2005, Blixseth arranged a $375 million loan to the club from Credit Suisse, taking most of the money for himself and former wife Edra Blixseth. The club spiraled into bankruptcy soon after Tim Blixseth ceded control to his wife as part of the couple's 2008 divorce. It has since re-organized under new ownership. It's not just the club's creditors that want a piece of Blixseth: Montana tax authorities say he owes $57 million in back taxes on the money he diverted from the club. Court rulings in the tax dispute so far have come down in Blixseth's favor. An appeal by the Montana Department of Revenue is pending in federal court. Glasser earlier this month sued Blixseth's current wife, Jessica Blixseth, saying she was holding assets that Blixseth had fraudulently transferred to her. Glasser has previously asked a federal judge to incarcerate Blixseth for not abiding a court order. The trustee also has offered a reward to anyone who can reveal where Blixseth's fortune is hidden. Published: Tue, Nov 04, 2014