BOZEMAN – A Colorado company suing the owner of the exclusive Yellowstone Club to recoup a $13 million debt has asked a federal judge to issue a warrant for her arrest after she failed to appear at a scheduled court hearing.
The U.S. District Court in Colorado issued a separate arrest warrant on Feb. 13 for owner Edra Blixseth’s son, Matthew Crocker, the principal developer of Bozeman’s stalled Story Mill Development.
As of late Wednesday night, the judge had not issued a warrant for Blixseth, who had been ordered to appear earlier in the day for a hearing to determine the location and existence of her assets.
“The court is considering holding her in contempt,” said Robert Hatch, an attorney for Colorado-based Western Capital Partners LLC.
Blixseth’s spokesman Bill Keegan said late Wednesday that he was not aware of the latest developments.
Hatch said Blixseth and Crocker co-signed on mortgages with the company to finance development on several properties in Gallatin and Madison counties, including the Story Mill property, but defaulted on a $13 million loan on Dec. 6, 2007.
Blixseth modified the loan with Western Capital in June, pledging a condominium in Seattle as additional collateral, according to court documents. But the loan again defaulted in August, prompting Western Capital to file a complaint in federal court. Neither Blixseth nor Crocker responded, according to court documents.
Western Capital then attempted to recoup some of the $13 million from stock in Blixseth’s company, BLX Group, Inc., but Western Capital says Blixseth failed to relinquish the collateral.
The Story Mill Development, for which some of the $13 million loan was intended, was slated to be a 1,100-unit “green” development north of downtown Bozeman.
The latest action is not Blixseth’s first run-in with creditors.
Several months after assuming ownership of the Yellowstone Club from her ex-husband, Tim Blixseth, it was forced to file for Chapter 11 bankruptcy amid a flurry of debt and allegations of sketchy financial dealings.