Judge: Jailed resort founder unwilling to comply with orders

AP News
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Posted: May 11, 2015 8:23 PM

BILLINGS, Mont. (AP) — A judge said an appeal filed by the founder of a Montana resort for the ultra-rich to be freed from jail marked yet another attempt to divert attention from what he did with $13.8 million from a Mexican property sale.

Yellowstone Club founder Tim Blixseth was jailed in Great Falls on April 20 on a civil contempt order after being accused of defying a bankruptcy court order involving the resort.

U.S. District Judge Sam Haddon said the 65-year-old Blixseth of Medina, Washington, has failed to fully account for the money collected from the property in Mexico.

Creditors say Blixseth owes them $286 million that he illegally drained from the Yellowstone Club for his personal use prior to its 2008 bankruptcy.

The resort near Big Sky emerged from bankruptcy after it was sold in 2009. Blixseth has spent millions of dollars trying to fend off its remaining creditors.

In a report submitted to the 9th U.S. Circuit Court of Appeals, Judge Haddon wrote that Blixseth had shown continued noncompliance with the judge's earlier orders to account for the sale proceeds from Mexico.

Haddon said one declaration submitted by Blixseth showed that he personally received $1.2 million from the sale of the Tamarindo resort in the state of Jalisco.

One of Blixseth's attorneys, Philip Stillman, said Monday that Haddon should be removed from the case because he was using incarceration to punish Blixseth. Haddon should have offered Blixseth an alternative to comply with his orders before resorting to jail, the lawyer said.

The judge "has become grand jury, prosecutor, jury and judge on whether Tim's violated the court's orders," Stillman said. "Someone less involved in this issue would be better off, for the appearance of justice, to take the case over."

Haddon, however, wrote that Blixseth and his attorneys "continue to demonstrate, at a minimum, an unwillingness ... to comply with the court's orders."

He added that Blixseth's appeal to the 9th Circuit was "yet another example of an ongoing attempt to divert attention from the reality that remains — Blixseth continues in contempt for noncompliance with the court's orders."