The War for Yellowstone Club
Montana’s lavish club fell prey to a bad loan, a tanking economy and owners who couldn’t play nice. A year after going bust, the club is trying to exorcise its past and make amends with the community.
Palm Coast, FL – November 16, 2009
By: Cameron Morfit, Senior Writer, GOLF Magazine
Act two for the Yellowstone Club began with origami. In a cavernous ski lodge and before a yawning fireplace in southwest Montana, members of "the world’s only private ski and golf community" stated their hopes for the most embattled club in America, aired their grievances, and tossed a folded scrap of paper into the fire. Listed on the paper were the club’s accounts payable, millions in recently paid debt—money that local businesspeople feared they would never see when the club underwent a seismic bankruptcy in late 2008.
History will show that Yellowstone was one of a handful of high-end developments that were crippled by questionable loans, a list that includes Ginn Resorts, which has ended its title-sponsorship of LPGA and Champions tour events, and Idaho’s Tamarack Resort, which suspended operations this year.
A judge who’s overseeing the Yellowstone bankruptcy sided with creditors in calling the Credit Suisse loan "predatory," and during the proceedings the loan was reduced from the $310 million the club still owed to $80 million. Tim Blixseth is expected to learn early next year if he’ll be forced to pay back some of that debt. Edra Blixseth has declared personal bankruptcy.
Toby’s Commentary: The repercussions of the "predatory" Credit Suisse loans will reverberate for years. Some of the affected communities will recover, but most will not be recognizable from their original vision. The unsecured creditors at Yellowstone caught a lucky break when the bankruptcy judge subordinated Credit Suisse’s secured creditor status to that of the unsecured creditors. I wonder if any other bankruptcy jurisdictions will do the same; Ginn, Lake Las Vegas, etc.
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