Associated Press, Billings Gazette, June 3, 2006.
BOZEMAN — Three-time Tour de France winner Greg LeMond is among several people suing the millionaires-only Yellowstone Club and its owner, alleging Tim Blixseth tried to buy out their investments in the club at a fraction of the value and then refused to turn over financial records so they could determine the actual value.
LeMond, his in-laws, a company they own, and a friend of LeMond’s filed the lawsuit in Madison County on Wednesday. All own homes in the exclusive Yellowstone Club, a gated community south of Big Sky with many huge homes valued at $10 million or more, private golf, skiing and other amenities.
When fully occupied, the community will contain a maximum of 864 homes on 13,400 acres.
Blixseth said he was “pleased and relieved that they have filed the lawsuit. After many, many months of being threatened unless I deposit large amounts of cash in their accounts, I’m relieved that it will be resolved in a court of law by reasonable minds.”
The lawsuit says LeMond, David and Sacia Morris, Sacia Enterprises and LeMond’s friend Jorge V. Jasson each invested $2 million to purchase 1 percent of the Yellowstone Club in 2000.
In May 2005, Blixseth offered to buy out LeMond and the other plaintiffs, offering them each $1.25 million in cash and one undeveloped lot at the resort, valued at about $2 million.
Blixseth called it a “tremendous offer,” the lawsuit says.
However, Blixseth refused the plaintiffs’ request to see the club’s financial records. Since LeMond and the others are part owners of the resort, Montana law says that financial records must be available to them, the lawsuit contends.
The lawsuit also maintains that at the same time Blixseth was offering to buy out LeMond and the others, he was negotiating a loan with financial giant Credit Suisse. As part of the loan arrangements, the Yellowstone Club was appraised at $1.16 billion, according to the lawsuit, meaning a 1 percent share should be worth about $11.6 million.
The lawsuit said Blixseth took out a $375 million loan, returning $209 million to The Blixseth Group Inc. for “return of capital,” but nothing went to the other investors, the lawsuit says.
Blixseth had not told any of the other owners about the loan negotiations, the suit says.
“Indeed, BGI had planned to have purchased the plaintiffs’ equity interests — on the cheap — the day before the presentation to loan subscribers,” the lawsuit says.
Blixseth later withdrew his offer to buy the shares, but the plaintiffs continued to ask for the financial information.
The lawsuit says when the plaintiffs threatened to sue, BGI’s lawyer said “BGI and Blixseth would take action to expel plaintiffs as members of the Yellowstone Club.”
The lawsuit asks that the $209 million be fairly divided, that BGI, Yellowstone Development and Yellowstone Mountain Club provide full and complete access to financial records and that the plaintiffs be paid a fair value for their shares.
Blixseth last week launched Yellowstone Club World, which will offer millionaires exclusive access to eight posh vacation properties, like castles, islands and ranches, plus yachts and jets.
Blixseth said the initial offering of 25 memberships sold out in one day.