The bankrupt founder of the private Yellowstone Club in Montana whose members have included Microsoft Corp.’s Bill Gates was jailed for a second time after failing to account for proceeds from a resort in Mexico that he sold in violation of a court order.
Timothy Blixseth was ordered by U.S. District Judge Sam Haddon in Butte, Montana, to be taken into custody on Monday and held until he provides a full of accounting of the $13.8 million he received for the Tamarindo resort. Blixseth was briefly jailed by the judge in December after he was found in contempt in February 2014 for disobeying a bankruptcy court.
Blixseth became a billionaire after founding the Yellowstone Club as a private ski and golf resort and signing up wealthy corporate leaders including Gates. Blixseth bought Tamarindo as part of a plan to create a collection of similar, exclusive destinations around the world.
Michael Ferrigno, a lawyer for Blixseth, didn’t immediately respond to phone and e-mail messages seeking comment on Monday’s order.
An appeals panel ordered Blixseth freed six days after Haddon jailed him in December and instructed Haddon to craft an order saying specifically what Blixseth must do to avoid being in contempt of court.
Numerous Filings
In his order Monday, Haddon described Blixseth’s numerous filings in the Tamarindo matter and pointed out discrepancies among them.
“The volumes of documents and paperwork, regardless of size, are not an accounting,” Haddon wrote. “Moreover, Blixseth provided none of his personal bank statements, even though he received funds from the sale of Tamarindo.”
The Yellowstone Club, now out of bankruptcy, is owned by Crossharbor Capital Partners LLC, a private equity firm in Boston run by club member Sam Byrne.
Blixseth’s troubles started after he negotiated a $375 million loan from Credit Suisse Group AG in 2005. For years afterward, Blixseth and his then-wife, Edra, lived in a mansion in Palm Springs, California, surrounded by an 18-hole golf course and traveled the world in Gulfstream jets.
He started a company called Yellowstone Club World that bought property around the globe, including a castle in France, a 30,000-square-foot mansion on a private island in Turks and Caicos, and two yachts, named Piano Bar and Tooth Fairy. He also bought Tamarindo, a golf resort on the Pacific coast of Mexico.
2008 Divorce
Blixseth lost the club to Edra in a divorce in July 2008. It went bankrupt four months later.
Brian Glasser, the trustee for the Yellowstone Club Liquidating Trust, contends Blixseth has been using proceeds from the Tamarindo sale to maintain a semblance of the lifestyle he had when he ran the club.
“Most people would say that if you burn up $13.8 million in two years, you’re living pretty large,” Glasser, an attorney with Bailey & Glasser LLP, said Monday in an interview.
The case is Glasser v. Blixseth, 13-cv-00068, U.S. District Court, District of Montana (Butte).
