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The Yellowstone Club was to be one of the most ornate ski resorts in the West, a snowbound Shangri-la for the super rich described by The New York Times as "a ski community where there's no such thing as too much." That is, until the plan collapsed, with the club defaulting on loans worth hundreds of millions of dollars and the developer, Tim Blixseth, accused of misusing funds to support his extravagant lifestyle.
Blixseth is currently facing $250 million in judgments from creditors and has failed to account for $13.8 million in spending. That failure put him in jail for contempt of court, where a district court judge says he'll remain until a full accounting is made. He won't be getting any help from the Ninth Circuit either, as the appeals court refused his petition for release yesterday.
The Yellowstone Club: A Very Extravagant Disaster
Located just outside Yellowstone National Park, the Yellowstone Club was to provide ski and golf services to some of the very richest people in the world. The ridiculously ornate resort homes included such amenities as heated driveways -- in a ski resort!
The plan collapsed in 2008, among accusations that Blixseth and his wife had been borrowing from the resort's funds without collateral. After the collapse came the lawsuits. With the lawsuits came court orders -- court orders that Blixseth has had a hard time complying with. In one example, Blixseth sold a resort in Mexico, against the orders of a bankruptcy judge. He has since refused to account for the $13.8 million from that sale.
Where Did the Money Go?
When ordered to explain where the money had gone, Blixseth provided records which were "incomplete" and "incomprehensible," according to The Desert Sun. Those files did not even include his personal bank records. After Blixseth's lawyers swore months before that they had turned over all documents to the court, they produced another 200 pages of records -- just two days before Blixseth's contempt hearing.
That was too much for Judge Haddon of the District Court of Montana. Haddon ordered Blixseth jailed for contempt on April 20th. Haddon's order says that Blixseth will remain in jail until he accounts for the missing funds. Since the Ninth Circuit has denied his petition for release, Blixseth could spend a fair amount of time incarcerated. It won't be a totally new experience however -- the developer spent a week in jail last December, also for refusing to comply with Haddon's orders.
Ironically, the Yellowstone Club has bounced back from bankruptcy, selling over a billion dollars worth of resort homes. Blixseth hasn't had quite the same recovery.
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