Jailed Montana resort founder seeks release, cites Christmas

AP News
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Posted: Dec 22, 2015 11:41 PM
Jailed Montana resort founder seeks release, cites Christmas

BILLINGS, Mont. (AP) — The founder of a Montana club for the ultra-rich who's been jailed for more than 8 months in a legal tussle with his creditors has filed an emergency petition with a federal court asking for his release ahead of Christmas.

Yellowstone Club developer Tim Blixseth was jailed in April for contempt of court for not disclosing the details of a Mexico property sale. A three-judge panel of the 9th U.S. Circuit Court of Appeals on Tuesday gave the creditors a week to respond to Blixseth's request.

Creditors from the club's 2008 bankruptcy say Blixseth drained the coffers of the private ski and golf resort near Big Sky for his personal use. They've asked U.S. District Judge Sam Haddon to keep him in jail after winning more than $250 million in judgments against Blixseth but recovering little of that money.

Three prior release petitions from Blixseth have been turned down by the 9th Circuit and the U.S. Supreme Court.

But he had success with a holiday-season appeal in 2014. Jailed for a week in the same case last December, Blixseth was sprung by the 9th Circuit on Christmas Eve. A two-judge appellate panel said Haddon was not specific enough in his order for Blixseth to disclose the Mexico property sale details.

Blixseth, 65, of Medina, Washington, submitted more than 9,000 pages of financial documents during his attempts to placate the judge but soon ended up back in jail when Haddon dismissed those attempts as "somewhat lacking."

In the latest petition, filed with the 9th Circuit Monday night, attorney Philip Stillman noted that it's been two months since Haddon held a trial to decide if Blixseth has complied with his prior orders.

"The District Court now appears to have no intention of issuing a ruling after trial until at least after Christmas, if not New Year's Day, for purely punitive reasons," Stillman wrote.

The money Blixseth took from the Yellowstone Club fueled a globe-trotting lifestyle and helped the one-time billionaire get onto the Forbes 400 list of the wealthiest Americans. The resort sunk into bankruptcy just after he gave it up to his ex-wife during their divorce, and attorneys for the club's creditors have since hounded him.

While the club's bankruptcy case was pending, a judge prohibited the sale of Blixseth's Tamarindo resort in the Mexico state of Jalisco, which he initially bought for $40 million. Blixseth sold it anyway, for $13.8 million, in 2011.