BILLINGS – The divorced co-founders of the Yellowstone Club are waging an increasingly bitter legal fight over the remnants of their opulent empire in the wake of the club’s recent sale to a Boston investor.
Tim Blixseth ran the 13,600-acre southwest Montana resort until last August, when Edra Blixseth took over following the couple’s divorce.
Prior to their breakup, the Blixseths bankrolled their luxurious lifestyle in part by diverting hundreds of millions of dollars from the club’s coffers to buy jets, fleets of cars and vast estates. With the resort now changing hands and creditors at their heels, the Blixseths are turning on one another to grapple over what’s left of that fortune.
Edra blames her former husband for driving the club into Chapter 11 bankruptcy protection last year and for spurring her own bankruptcy, which she filed in March with debts of at least $157 million.
But in newly filed documents in her bankruptcy case, Tim Blixseth accuses his former wife of engaging in repeated fraud in a failed attempt to mask her financial failings.
He also says she tried to ruin him by scuttling a deal he had to sell the club last year for $470 million — more than four times the $115 million that Boston-based CrossHarbor Capital Partners is now paying to acquire the property.
In an affidavit filed Thursday, Tim Blixseth wrote that Edra “engaged in a systematic campaign riddled with fraud, deception and illegal conduct with the singular goal of wrestling control of the (Yellowstone Club) and ruining me in all respects, at whatever the costs.”
Underlying the couple’s financial disagreements is a personal spat rooted in their divorce after 25 years of marriage.
In Edra’s telling, her former husband is out to destroy her reputation — all the while benefiting from the millions she alleges he drained out of businesses including the Yellowstone Club.
Meanwhile, Tim Blixseth paints a picture of Edra reveling in the end of their marriage, by throwing a $90,000 “divorce celebration party” for about 100 guests at her 240-acre California estate. He alleges in court documents that guests took turns smashing a Tim Blixseth pinata before heading home with “party favors in the form of toilet paper bearing my photograph on each and every sheet.”
Edra Blixseth’s spokesman, Bill Keegan, said she was reviewing Tim’s most recent allegations after receiving them Thursday.
“It appears that Tim Blixseth is using the same harassment tactics that he has employed for some time,” Keegan said. He said she would comment on the allegations after the review.
In a bid to avoid a forced sale of her assets, Edra Blixseth last week asked a federal judge in Butte for time to reorganize her financial affairs. Tim Blixseth’s affidavit was filed as part of a motion to block that request.
To help shore up her finances, Edra has said she wants to reopen the couple’s divorce case — a move that could potentially shift some of her debts onto her former husband.
A hearing in the case is set for June 16 in Butte before U.S. Bankruptcy Judge Ralph Kirscher.
Kirscher has rejected past accusations that Edra colluded with CrossHarbor managing partner Sam Byrne to scuttle the $470 million sale of the club last year. Byrne was also the buyer in that deal; he backed out at the last minute.
Yet the judge also has been circumspect about Edra’s attempts to mend her finances, citing her lack of any income and failure to keep insurance on much of her $107 million in assets. They include nine residences, a fleet of cars and more than $3 million worth of furs, art and jewelry.