Update on the Yellowstone luxury residence club in Montana that filed for bankruptcy earlier this month.
Yellowstone managed to secure a $4.5 million temporary recently, which saw the club through the last three weeks, but the well has run dry once again. Owner Edra Blixseth is scheduled to appear before a judge once again today, in an effort to stave off the club’s 700 creditors and attempt to re-structure the debt. At the recent bankruptcy hearing, Judge Kirscher commented that there was “probably adequate wealth” for a bailout among the club’s estimated 340 members.
But this seems unlikely as the members are busy jostling for position at the head of the creditor line, and allegations of mis-management of funds are flying thick and fast. The major stumbling block seems to be the disappearance of some $200 million of a loan arranged through Credit Suisse, which some how found it’s way into a private company under the control of Ms. Blixeth’s now ex-husband. Quite exactly how you mis-place that amount of money is a mystery to me.
Ms. Blixeth denies the allegations, although she voiced exactly the same allegations during the couple’s recent divorce battle. Documents filed in the bankruptcy proceedings reveal a pretty staggering amount of spending, ranging from a $32 million Mexican estate, to $306,508 in imported rugs and $70,036 worth of Christmas decorations.
Either way, the club’s members, who have each stumped up a minimum of $250,000, are not impressed and seem unlikely to put up further monies to bail the club out. From what I understand, the club has enough money to stay open until Friday. Members who do choose to visit during this time might not get the sort of welcome they have become accustomed to in the past, with a long list of smaller local creditors and contractors also unpaid. The club owes back pay and months of invoices to staff and local firms. Local Ace Electric owner Dwight Fischer has already laid off 10% of his staff and is owed more than $300,000, and it looks as though members may end up having to mix their own Martinis.
