Court orders Montana resort founder freed from jail

AP News
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Posted: Jul 06, 2016 6:43 PM
Court orders Montana resort founder freed from jail

HELENA, Mont. (AP) — A federal appeals court on Wednesday ordered the release of the founder of a Montana club for the ultra-rich, who has spent the last 14 months in jail for failing to account for the money from the sale of a resort in Mexico.

The 9th U.S. Circuit Court of Appeals granted Yellowstone Club founder Tim Blixseth's emergency motion for release pending his appeal. The two judges who wrote the order, Alex Kozinski and Richard Paez, did not explain their decision.

Blixseth was released Wednesday afternoon, Cascade County sheriff's officials said.

Blixseth's attorneys had tried and failed multiple times before Wednesday to free him from the Cascade County Detention Center, where U.S. District Judge Sam Haddon sent him in April 2015 on a civil contempt order.

Haddon jailed the Medina, Washington, resident for not revealing what happened to millions of dollars from the sale of the resort in Mexico, which was made during the Montana mountain resort's bankruptcy proceedings. Haddon had said jailing Blixseth would coerce him to fully account for the $13 million he received from the 2011 sale of the Tamarindo resort.

Blixseth's attorneys have said he has done everything he can to cooperate with the judge's orders. His attorneys reached a $3 million settlement with the club's creditors in April that closed the Mexican resort case.

Blixseth attorney Becky James wrote in the most recent appeal for Blixseth's release that keeping him in jail now that the Tamarindo case is over amounts to judicial abuse of power.

"Mr. Blixseth's continued incarceration can only be viewed as punishment, for which he has been afforded no due process protections," his attorney, Becky James, said in the most recent appeal.

Blixseth is out of jail, but his appeal is still before the appeals court. He will argue that the documents he produced was a full accounting of the Tamarindo sale and that Haddon's civil contempt order was not appropriate, James said Wednesday.

Kevin Barrett, the attorney for the Yellowstone Club's creditors, did not return calls for comment. Barrett had opposed Blixseth's release, saying the former billionaire had chosen to appeal Haddon's rulings rather than comply with the orders.

Courts have previously ruled that Blixseth fraudulently transferred a $286 million loan to the club for his personal use. The Yellowstone Club's creditors are seeking more than $250 million from Blixseth.

The private ski and golf resort, whose members include Bill Gates and former Vice President Dan Quayle, emerged from bankruptcy under new ownership in 2009.

Blixseth originally bought the Mexican resort known as Tamarindo for $40 million. He sold it in 2011 for $13 million in violation of a bankruptcy judge's order not to sell assets while the Yellowstone Club bankruptcy case was pending.

The proceeds from its sale are gone, his attorneys have said.