Bankrupt Yellowstone Club Gets Short-Term Loan Approval

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(BIG SKY, MT)  - The ultra-exclusive Yellowstone Club, which filed for Chapter 11 bankruptcy protection Nov. 10, received a credit lifeline to stay open through the winter season. The lifeline, in the form of a $4.5 million loan, was approved Nov. 13 in U.S. Federal Bankruptcy Court in Montana.

Yellowstone Club co-founder Edra Blixseth sought the secured short-term financing so the private ski and golf club would be able stay open for the ski season and conduct normal operations as it completes a plan of reorganization.

Yellowstone Club announced it was going into Chapter 11 bankruptcy Nov. 10 in an effort to seek relief from mounting debt pressure originally estimated at $343 million. New court documents, however, show the Yellowstone debt to be at least $399 million. The club's assets are listed at $599 million.

According to Yellowstone Club spokesman Bill Keegan, Yellowstone Club management said that it expects to open for the ski season in early December and anticipates no disruption in services to its membership or winter season employment at this time.  

In its filing with the Bankruptcy Court, Yellowstone said that a number of factors contributed to a difficult liquidity position, including the current situation in the credit markets and an inability to secure new financing arrangements with its creditors.  

The company emphasized that it expects to emerge from federal bankruptcy protection as soon as possible with a recapitalization plan acceptable to its creditors and bondholders.

"As the premier private ski and golf community, we felt this step was necessary to address short-term liquidity constraints and preserve Yellowstone Club's long-term future," said Blixseth, who now oversees Yellowstone as chief executive after taking over the club from her now divorced husband, Tim Blixseth. "We value and appreciate our membership's understanding and support during this challenging time."

Yellowstone's bankruptcy news is another setback for the invitation-only club known for having high-profile members such as Bill Gates, former Vice-President Dan Quayle, Comcast Corp. president Steven Burke, ex-Congressman Jack Kemp and cycling star Greg LeMond.

Earlier in the year, Yellowstone's billionaire founders had a celebrated divorce that made the front page of the Wall Street Journal, then, in August, the club settled a lawsuit with LeMond for $39.5 million.

LeMond and several co-plaintiffs had accused Tim Blixseth of trying to buy out their minority stake in the club for less than its true value, and borrowing hundreds of millions of dollars without collateral.

Tim Blixseth and Edra Blixseth, who lives part-time at a 240-acre estate in Rancho Mirage, Calif., called Porcupine Creek, opened the millionaires-only club in 1999 on 13,400 acres in southwestern Montana's Gallatin Mountains. Club membership alone cost a reported $250,000.

After emerging from her divorce with control of the club, Edra Blixseth in September announced an ambitious expansion to Yellowstone with new partner, Scottsdale, Ariz.-based Discovery Land Company. Among the new plans were 450 additional houses and condos, a luxury spa, golf clubhouse, baseball field and more ski runs.

Of course, those plans are now on hold pending the outcome of the club's financial troubles.