Exclusive ski resort in US files for bankruptcy

[sionvalais]

"At Yellowstone Club," proclaims the publicity for the exclusive Montana ski resort, a discreet winter wonderland for the likes of Bill Gates, "it's all about Private Powder."


But with the economic downturn affecting even the super-rich, it turns out that Yellowstone Club, in the words of its billionaire CEO Edra Blixseth, is all about "short-term liquidity restraints".


The private slice of Montana's Gallatin mountains, set on 13,400 acres near Big Sky, Montana and a home-from-home to 350 extremely rich members, filed for bankruptcy this week.


The filing comes in the wake of a series of disputes between the club's recently-divorced founders, Tim and Edra Blixseth. An ambitious plan to expand the private resort by adding Scottish castles, French chateaus and a slice of Pacific beachfront in Mexico to create Yellowstone Club World failed.


The Blixseths were accused of using some of a $375m loan secured for the expansion for their own personal use. Until their divorce the couple lived on a private estate in Palm Springs boasting its own 19-hole golf course.


However the finances of the Yellowstone Club, which is essentially a time-share scheme for the absurdly wealthy, who pay $250,000 to join, could not sustain its founders' ambitions. A $455m deal to sell the club collapsed, sparking a tussle between the founders for control of the entity.


This summer, one of the club's members, three-time Tour de France winner Greg LeMonde, brought a lawsuit against the Blixseths of trying to buy his minority share in the club for less than its value. LeMonde and his co-plaintiffs won $39.5m from the couple.


Edra Blixseth, a hotel entrepreneur before she met her husband, who made his fortune selling timber properties, assumed control of the company and attempted to sell some of its international properties.
But the lending crisis stalled plans to refinance the company, leading to this week's bankruptcy filing.


The "current financial situation is negatively affecting club operations, employee morale and the confidence of vendors", Edra Blixseth said in a letter to members.


Spokesman Bill Keegan said that the club had financing for daily operations and would be open for the ski season.


"The lending markets froze up so they could not structure a credit facility to their fashion," a spokesman said. "They felt this was the best way to protect the members and protect the club and its future."