BILLINGS – 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 has asked a federal judge in Montana 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.
A hearing on the matter is scheduled for Thursday.
“The members are getting increasingly concerned,” said Jonathan Alter, one of the group’s attorneys. “This (loan) is only financing for approximately three weeks. We want to protect the long-term interests of the members and the value and viability of this club.”
Alter’s clients claim the $250,000 deposit required of club members and their $18,000 in annual dues contributed approximately $88 million since the club was founded. That’s on top of a $375 million loan taken out by Blixseth’s former husband, Tim Blixseth, in 2005.
The bulk of the club’s current debt stems from that loan.
Tim Blixseth has since ceded control of the club to his ex-wife as part of their divorce settlement.
“Today, that money seems to be gone and the members want to know why,” attorneys for the Ad Hoc Committee members wrote in court filings.
They added that it “appears that a large portion of the $375 million loan … was diverted for non-Yellowstone Club purposes. Had the funds been properly used, it is likely that the Debtors (the club) would not find themselves in the position they do today.”
A spokesman for the Yellowstone Club could not be reached immediately for comment.
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