Yellowstone Club Founder Settling Tax Claims

By Beacon Staff

BILLINGS – Yellowstone Club founder Tim Blixseth is settling unpaid income tax claims from California and Idaho, but still faces a $56 million bill from Montana.

The former billionaire disclosed the settlement Wednesday. He declined to reveal how much he will pay.

“While Idaho and California were disputed claims, we’ve reached a mutual settlement for them to withdraw,” he said.

He said he would not comment further until court documents related to the settlement were filed. An attorney for the states said payment on the back taxes was expected Wednesday.

Idaho and California tax authorities had alleged he owed more than $2 million. They joined forces with Montana earlier this month on a federal court petition that could force Blixseth into involuntary bankruptcy.

That petition was filed in Nevada, where Blixseth has transferred most of his assets into a family trust.

Wednesday’s partial settlement was confirmed by Lynn Butler, a Texas bankruptcy attorney representing Montana and California in the case.

Butler said Montana still was seeking approximately $56 million from the 59-year-old real estate baron, best known as the founder of Montana’s Yellowstone Club, an enclave for the ultra-rich.

Authorities say he drained hundreds of millions of dollars from the resort prior to its 2008 bankruptcy.

Blixseth denies the allegations. He contends Montana’s tax claims against him were engineered by state authorities working against him in collusion with creditor Credit Suisse and the club’s new owners, CrossHarbor Capital Partners of Boston.

Those claims have no validity, Blixseth’s attorneys say. They point to an April 13 court filing by the Montana Department of Revenue in which the agency says Blixseth’s tax liability “was not fully adjudicated prior to the commencement of the bankruptcy proceedings.”

That means how much Blixseth owes in the state remains in dispute, whereas the forced bankruptcy petition filed in Nevada cited $219,000 in allegedly undisputed liabilities.

Butler, the state’s attorney in the forced bankruptcy case, said Blixseth already has admitted to the liability in separate court proceedings.

Stay Connected with the Daily Roundup.

Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox.