Creditors ask for deposits back, force liquidation of Yellowstone Club’s world assets.
By Courtney Lowery, NewWest.net, January 26, 2009
Members this week filed an involuntary Chapter 7 bankruptcy petition—liquidation—against Yellowstone World Club, a spinoff of the Yellowstone Club that was envisioned as a world-wide time-share program for the richest of the rich.
The Chapter 7 petition was filed Sunday on behalf of four creditors, who total are claiming $4.65 million in refunds for deposits in Yellowstone Club World, which when launched boasted assets like the Chateau de Farcheville in France and a private golf club near the famous St. Andrews golf course in Scotland. Owner Tim Blixseth had imagined the club as having up to 150 members who would pay initiation fees of up to $10 million to rove as they wished to properties Tim Blixseth has bought across the globe. But, it never got off the ground and when it ceased operations last year, there were only a handful of members, most of them Yellowstone Club members who had “upgraded” to Yellowstone Club World.
The filing is the latest in the legal fiasco that is the Yellowstone Club bankruptcy case and while it is separate, because the convoluted financial picture that made up the empire of Tim and his ex wife Edra, it is also likely to be part of the wrangling over the Montana resort. The $375 million Credit Suisse loan that has been so central in the original bankruptcy proceedings was in part, used to purchase the properties for Yellowstone Club World and one property in particular, the chateau in France, was volleyed as collateral in Edra Blixseths takeover of the club (they divorced last year) and eventually for the post-Chapter 11 financing to continue operations. A $60 million sale of that property fell through in August.
Edra won the chateau in France and the Scotland property as part of the same settlement that gave her the Yellowstone Club. She had promised to “monetize” both properties for the benefit of the club.
The Chapter 7 filing is an aim to sort out, and likely more quickly than in Chapter 11, who and what entity now controls the Yellowstone Club World properties.
“We’re concerned the assets they do have are no longer in control of the Yellowstone Club World,” said John Amsden, one of the laywers representing Yellowstone Club World members.
Members who paid to use to those properties are now being denied access and considering at least one of the properties is now being used as leverage in the Chapter 11 proceedings, the Chapter 7 is a way for the world club members to protect their interests in those assets.
“The members of the Yellowstone Club World were promised access to very specific and significant properties in return for their significant membership dues. They anticipate that their interests to those properties will be respected,” Amsden said via email.
The court will appoint a trustee within 20 days who will begin sorting through the assets.
“The involuntary bankruptcy was necessary because it appears that there is no one minding the Club’s business,” Amsden said. “We hope that the matter can be resolved with a minimum of expense.”
The petitioners include Angus A. MacNaughton of Danville, Calif., Edgar A. Rainin of Berkeley, Calif., Yoav Rubinstein of Toronto, all of whom are requesting $1.5 million each in refunds, and Thomas W. Hook of Houston, who is requesting $150,000. All four are also Yellowstone Club members.
For background on the story: