https://gotoby.com/wp-content/uploads/2020/10/go-toby-logo.jpg 0 0 Toby Tobin https://gotoby.com/wp-content/uploads/2020/10/go-toby-logo.jpg Toby Tobin2010-02-24 00:00:002021-03-19 14:52:26Former Timber Baron Tim Blixseth Goes on Trial, Accused of Looting $286M from Yellowstone Club
Former Timber Baron Tim Blixseth Goes on Trial, Accused of Looting $286M from Yellowstone Club
Credit Suisse loan to Blixseth, Ginn, and other luxury resort developers allowed them to take large profit distributions from the proceeds of multi-million dollar loans.
Palm Coast, FL – February 23, 2010 – Credit Suisse marketed its multi-million dollar loans to developers of luxury resorts, including Yellowstone Club, Lake Las Vegas, Tamarack, and four Ginn projects. The loans allowed developers to take "profit distributions" directly from the loan proceeds, while Credit Suisse pocketed millions in fees. CS fronted the loans but the money came from private investors.
All the developers eventually defaulted triggering a rash of bankruptcies, foreclosures, and lawsuits. It’s possible the legal quagmire resulting from the real estate crash will absorb the equivalent of one year’s graduating class from all U.S. law schools combined.
Property owners recently filed a lawsuit against Credit Suisse, claiming that CS duped the luxury resort developers into taking out loans so large that default was certain. According to the lawsuit, CS abetted by proxies, would then sweep in to effectively take over the resorts at fire sale prices.
Now, the founder of the millionaires-only Yellowstone Club faces charges that he bilked the private Wyoming ski resort out of $286 million.
Is that real money?
I can remember when 1 million was big money, guess I have lived too long!
Is Ginn next?
Ginn and Lubert Adler took a $333 million distribution from the $675 million credit suisse loan. Are they next to face trial?
I’m no lawyer
But it doesn’t seem to me that Blixseth committed fraud if the monetary disbursement that he took personally out of the loan was disclosed. I believe that "developer profit" or "builder profit" is a typical line item in a banks documents. It is how the developer can live during the time of construction, etc. Of course this amount far exceeded anything that resembled prudence and was grossly out of whack but it doesn’t seem that he did anything wrong. Immoral as anything I’ve ever heard but I think he is on the right side of the law.