BILLINGS, Mont. – Creditors in the bankruptcy of a Montana resort for the ultra-rich are seeking court sanctions against its founder, a former billionaire, for refusing a jailhouse deposition.
Yellowstone Club founder Tim Blixseth of Medina, Washington, has been in a Montana jail since April. That’s when a judge held him in contempt for not disclosing what happened to part of the fortune he acquired after diverting funds from the private ski and golf club near Yellowstone National Park for his personal use.
On Dec. 7, Blixseth refused to come out of his jail cell in Cascade County for a previously scheduled deposition, attorneys for the club’s remaining creditors said in court documents. They want a federal judge to force Blixseth to appear for the deposition this week and also repay them more than $31,000 in legal expenses.
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But Blixseth attorney Paul Brain says his client had no obligation to appear for the deposition, which was part of a lawsuit targeting the assets of Blixseth’s wife, Jessica.
“These guys simply failed to properly compel Tim’s appearance,” Brain said. “He had no obligation to appear because he never was served a subpoena for the deposition.”
A Monday hearing in the matter was scheduled before U.S. District Judge Richard Jones.
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Blixseth gave up control of the Yellowstone Club during his 2008 divorce from ex-wife Edra Blixseth. The resort, with its private ski hill and an exclusive membership that includes Microsoft’s Bill Gates, soon spiraled into bankruptcy.
Its creditors say Blixseth owes them more than $250 million after draining the club’s coffers prior to giving up control. The Yellowstone Club later was sold and is under new ownership.
How long Blixseth will remain in jail is uncertain. His attorneys contend he was unfairly incarcerated, but the club’s creditors counter that Blixseth has yet to come clean on his sale of a Mexico resort in violation of a federal bankruptcy judge’s order.
A trial in the dispute was held in October. A ruling is pending from U.S. District Judge Sam Haddon.
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