It’s a sign of the times that even the super rich can’t get credit.
Yellowstone Club, the exclusive golf and ski resort that counts billionaires like Microsoft founder Bill Gates among its members, sought bankruptcy protection Monday, citing sinking real estate values and tight money.
The club in the pristine slopes around Big Sky, MT, just north of Yellowstone National Park, is part resort and part residential community for the rich. It offers mountain lots beginning at $2 million and counts members such as News Corp. President Peter Chernin, hotelier Barry Sternlicht and former Citigroup executive Todd Thomson.
In a filing in U.S. Bankruptcy Court in Bhutte, MT, the Yellowstone Mountain Club LLC said it was unable to pay creditors because of “decreasing revenues brought on by, among other things, economic factors causing both difficulties in obtaining credit and declines in the real estate market.”
The filing was signed by owner Edra Blixseth, who co-founded the business in 2000 with former husband Tim Blixseth, on 13,600 acres of logging land. She asked for an expedited hearing so the company could get financing and continue doing business.
In better times, the club had generated huge amounts of cash. The rich paid out $205 million for 72 properties in 2005 alone, most of them empty lots on wooded slopes, on which they built chalets.
Besides skiing and playing golf, chalet owners fish in the Gallatin, the river featured in Robert Redford’s A River Runs Through It.
Blixseth, who lives in a 30,000-square foot mansion in Rancho Mirage, CA, took control of the resort in July after a bitter divorce. “I have always felt that the Yellowstone Club is my baby,” she wrote to members in a July 6 letter announcing she had taken control.
Yellowstone Development LLC, one of the two entities through which she owns the club, listed assets of $500 million to $1 billion, and debt of less than $500 million, according to court documents.
The club apparently borrowed heavily in the past – securing a $375 million loan from Zurich-based Credit Suisse Group in 2005, according to Bloomberg News.
Trouble started soon after, when club member Greg LeMond, the first American to win the Tour de France, sued Tim Blixseth, alleging that he pocketed $209 million of the Credit Suisse loan as a return of capital to early investors.
LeMond claimed that he was entitled to some of that money as an early investor.
In August, Edra Blixseth paid LeMond and three other early investors $8 million and promised to pay another $13.5 million by Nov. 15.
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