MISSOULA, Mont. -- A down-on-his-luck billionaire and a banking giant with a soiled name sparred Wednesday in bankruptcy court, each blaming the other for fleecing the ritzy Yellowstone Club of nearly $300 million.
Dirty laundry from the world of international finance and the divorce of club founders Tim and Edra Blixseth remained on display in the ongoing bankruptcy saga of the ultra-exclusive alpine getaway for millionaires.
Lawyers for club founder Tim Blixseth argued that Credit Suisse has seized control of the club's bankruptcy trust and crafted a deal that stands to enrich the trustee who wants to force Blixseth to repay a $286 million loan Credit Suisse arranged for the club in 2005.
Creditors, captained by trustee Marc Kirschner, counter that Blixseth intended to defraud the Yellowstone Club by lining up big loans to bankroll a lifestyle of luxury estates, personal jets and luxury cars. The creditors want to collect even though the club emerged last year from its 2008 bankruptcy filing.
They want a civil fraud judgment against the real estate tycoon -- a Roseburg native who made his fortune trading plots of timberland -- who used a loan ostensibly for the club to bankroll a gilded lifestyle of luxury jets, fleets of cars and international estates.
Blixseth argues he was the victim of a predatory lending scheme by Credit Suisse and was given the loan without regard for whether the club could repay the money.
Just last year, the bankruptcy court admonished the Swiss bank for "overreaching and predatory lending practices" meant to "line its pockets" with loan fees from resorts like the Yellowstone Club, which counts Microsoft Corp. co-founder Bill Gates and former Vice President Dan Quayle as members.
"Those are the same lenders who have a majority interest on the trust board," said Blixseth lawyer Tom Banducci.
Blixseth's lawyers said Kirschner stands to gain millions if he can collect a full $286 million from Blixseth and it's lawyers with ties to Credit Suisse that are trying to recoup the money.
But creditors seeking a civil fraud judgment against the real estate tycoon said Credit Suisse has little to do with the trust's pursuit of Blixseth.
Kirschner beat back an assertion that Credit Suisse hand-picked the board he reports to.
"Definetley not," he told the court.
The Blixseth divorce, with its $9-million-a-year housing maintenance payments and contentious legal battles, again was a key issue.
Tim Blixseth's lawyers argued that ex-wife Edra Blixseth, who took control of the club right before its bankruptcy filing, also assumed the club's debts. She later sold the club in an insider deal to its creditors.
U.S. Bankruptcy Judge Ralph Kirscher will have to sort through the intrigue to determine whether the the transfers of money from the club to Tim Blixseth were fraudulent.
The judge said he has the power to void them and force repayment.
Kirschner noted that the bankruptcy court has already admonished Credit Suisse for its behavior in granting the loan. Now its Blixseth's turn.
"I feel quite confident in our case, but the judge will have to make the decision based on the facts presented in the next several days," he said. "
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This Statement is something that Tim Blixseth Should have Sued on "fleecing the ritzy Yellowstone Club of nearly $300 million" He did not Fleece the Yellowstone Club, he got caught up in the Same Montana Real Estate Frenzy as the rest of them did, his was just bigger. The Realtors Association MLS Data Base, the Appraiser, the National Association of Realtors and the Lenders are Who Was Doing the "Fleecing".
Dirty laundry from the world of international finance and the divorce of club founders Tim and Edra Blixseth remained on display in the ongoing bankruptcy saga of the ultra-exclusive alpine getaway for millionaires.
Lawyers for club founder Tim Blixseth argued that Credit Suisse has seized control of the club's bankruptcy trust and crafted a deal that stands to enrich the trustee who wants to force Blixseth to repay a $286 million loan Credit Suisse arranged for the club in 2005.
Creditors, captained by trustee Marc Kirschner, counter that Blixseth intended to defraud the Yellowstone Club by lining up big loans to bankroll a lifestyle of luxury estates, personal jets and luxury cars. The creditors want to collect even though the club emerged last year from its 2008 bankruptcy filing.
They want a civil fraud judgment against the real estate tycoon -- a Roseburg native who made his fortune trading plots of timberland -- who used a loan ostensibly for the club to bankroll a gilded lifestyle of luxury jets, fleets of cars and international estates.
Blixseth argues he was the victim of a predatory lending scheme by Credit Suisse and was given the loan without regard for whether the club could repay the money.
Just last year, the bankruptcy court admonished the Swiss bank for "overreaching and predatory lending practices" meant to "line its pockets" with loan fees from resorts like the Yellowstone Club, which counts Microsoft Corp. co-founder Bill Gates and former Vice President Dan Quayle as members.
"Those are the same lenders who have a majority interest on the trust board," said Blixseth lawyer Tom Banducci.
Blixseth's lawyers said Kirschner stands to gain millions if he can collect a full $286 million from Blixseth and it's lawyers with ties to Credit Suisse that are trying to recoup the money.
But creditors seeking a civil fraud judgment against the real estate tycoon said Credit Suisse has little to do with the trust's pursuit of Blixseth.
Kirschner beat back an assertion that Credit Suisse hand-picked the board he reports to.
"Definetley not," he told the court.
The Blixseth divorce, with its $9-million-a-year housing maintenance payments and contentious legal battles, again was a key issue.
Tim Blixseth's lawyers argued that ex-wife Edra Blixseth, who took control of the club right before its bankruptcy filing, also assumed the club's debts. She later sold the club in an insider deal to its creditors.
U.S. Bankruptcy Judge Ralph Kirscher will have to sort through the intrigue to determine whether the the transfers of money from the club to Tim Blixseth were fraudulent.
The judge said he has the power to void them and force repayment.
Kirschner noted that the bankruptcy court has already admonished Credit Suisse for its behavior in granting the loan. Now its Blixseth's turn.
"I feel quite confident in our case, but the judge will have to make the decision based on the facts presented in the next several days," he said. "
A Few Thoughts on this Article by Investigative Blogger Crystal L. Cox
"Kirschner noted that the bankruptcy court has already admonished Credit Suisse for its behavior in granting the loan. "
What? How Can a Bankruptcy Judge Let Credit Suisse off the Hook? Was there an Investigation ? I For One as a Broker Owner in Montana, I Say the Market was Rigged, I Say Lenders Like Credit Suisse knew Damn well what they were doing. Read "Confessions of a Mortgage Broker" or "Confessions of a Subprime Lender" - they knew and they let appraisals come in at 10% higher, and then higher and higher they went..
the MLS Data was NEVER policed for Accuracy or Quality Control to ensure that Appraisals were anywhere near an Actual Value. And in fact it has not been that long were we as Brokers in Montana could go in and change the SOLD Data way after the Fact... now many MLS Data bases have changed that and a form is required but still no proof.. What a Broker Says, Goes.. ..
There were even people who would Fake a Sale in a Development Similar to the Yellowstone Club in Order to Get a "Comp" to make an Appraisal Come out "Right". In my Market in Northwest Montana the APPRAISER would call me, the Broker Owner - the Real Estate Agent on a Deal and Say "Whatia Need it to Come In At"
the MLS Data was NEVER policed for Accuracy or Quality Control to ensure that Appraisals were anywhere near an Actual Value. And in fact it has not been that long were we as Brokers in Montana could go in and change the SOLD Data way after the Fact... now many MLS Data bases have changed that and a form is required but still no proof.. What a Broker Says, Goes.. ..
There were even people who would Fake a Sale in a Development Similar to the Yellowstone Club in Order to Get a "Comp" to make an Appraisal Come out "Right". In my Market in Northwest Montana the APPRAISER would call me, the Broker Owner - the Real Estate Agent on a Deal and Say "Whatia Need it to Come In At"
The Montana Real Estate Frenzy was OUT OF CONTROL, and Lenders like Credit SuisseKNEW full well that it would fall and they covered themselves.. Many Even Got a "bailout" ..
The Market climbed way to fast at that time and Lenders Gave Mortgage Brokers and Even Realtors incentives to Sell those Loans... then the Lenders would Sell on the Secondary Market, there is a Whole lot of Truth to Tim Blixseth's Claim of "Predatory Lending" .. .It was Rampant, especially in Markets such as Whitefish Montana, Flathead Lake, Bigfork, and Bozemen Montana.
The Market climbed way to fast at that time and Lenders Gave Mortgage Brokers and Even Realtors incentives to Sell those Loans... then the Lenders would Sell on the Secondary Market, there is a Whole lot of Truth to Tim Blixseth's Claim of "Predatory Lending" .. .It was Rampant, especially in Markets such as Whitefish Montana, Flathead Lake, Bigfork, and Bozemen Montana.
Judge Ralph Kirscher, Seems to me to be Biased and Exercising Some Absolute Power in this Case and the Truth, the Facts are Of No Concern... just my Opinion of Course. However I have had a behind the Scenes look at Bankrupcty Corruption in US Courts for 2 years as an Investigative Blogger and as a Real Estate Industry Whistleblower and a 10 year Broker Owner in Montana - Well I am not coming in Blind on all this... that's for Sure...
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"Creditors, captained by trustee Marc Kirschner, counter that Blixseth intended to defraud the Yellowstone Club by lining up big loans " Was it Really the Job of the Debtor, the Real Estate Buyer - Developer to "Value" Montana Real Estate. How was Tim Blixseth to know that the Lenders, Realtors, Appraisors and the Mortgage Industry as a Whole was Creating this Financial Fiasco. As a Real Estate Developer in Montana at the Time, I Imagine the Local Commissioners, the Realtors and EVERYWAY laid out the Red Carpet.. it happened to Many .. MANY.. way to Many Resorts all over Montana.. NOT Just the Yellowstone Club.
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"Creditors, captained by trustee Marc Kirschner, counter that Blixseth intended to defraud the Yellowstone Club by lining up big loans " Was it Really the Job of the Debtor, the Real Estate Buyer - Developer to "Value" Montana Real Estate. How was Tim Blixseth to know that the Lenders, Realtors, Appraisors and the Mortgage Industry as a Whole was Creating this Financial Fiasco. As a Real Estate Developer in Montana at the Time, I Imagine the Local Commissioners, the Realtors and EVERYWAY laid out the Red Carpet.. it happened to Many .. MANY.. way to Many Resorts all over Montana.. NOT Just the Yellowstone Club.
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"The judge said he has the power to void them and force repayment." - WoW.. Absolute Power Like This, one Man? is there No Room for Fraud, Conflicts, Corruption? In My Opinion there is Plenty of Room for Corruption.
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This Statement is something that Tim Blixseth Should have Sued on "fleecing the ritzy Yellowstone Club of nearly $300 million" He did not Fleece the Yellowstone Club, he got caught up in the Same Montana Real Estate Frenzy as the rest of them did, his was just bigger. The Realtors Association MLS Data Base, the Appraiser, the National Association of Realtors and the Lenders are Who Was Doing the "Fleecing".
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"Credit Suisse hand-picked the board" REALLY? Gee No Conflict of Interest There???
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"Credit Suisse hand-picked the board" REALLY? Gee No Conflict of Interest There???
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Much More Coming Soon on ALL Aspects of Possible Fraud, Corruption, Trustee Conflicts of Interest, the Buyer of the Yellowstone Club "Conflicted?", and many more details of the Yellowstone Club Bankruptcy. Got a Tip ? Crystal@CrystalCox.com
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