Bil­lion­aire Blixseth still de­fi­ant be­hind bars

Busi­ness­man wages fight for his rights while ques­tions about his fi­nances go unan­swered

Chicago Sun-Times - - USA TODAY - Phil Drake

GREAT FALLS, MONT. Tim Blixseth, the one­time bil­lion­aire who hosted par­ties in which famed chef Wolf­gang Puck was flown in to pre­pare lav­ish meals for lu­mi­nar­ies such as Bill and Melinda Gates, is liv­ing amuch sim­pler life th­ese days.

Now an in­mate at the Cas­cade County Re­gional De­ten­tion Cen­ter, the em­bat­tled busi­ness­man, for­mer lum­ber baron, real es­tate de­vel­oper and song­writer spoke to the Great Falls Tribune in an ex­clu­sive in­ter­view about his in­car­cer­a­tion since April 20 for civil con­tempt of court ( he em­pha­sized the word “civil”), his bat­tles with the jus­tice sys­tem and a long list of wrong­do­ings that he says have been per­pe­trated against him.

Blixseth, 65, who founded the tony Yel­low­stone Club in Big Sky, en­tered the room in or­ange jail garb. Rather than rub­bing el­bowswith the rich and fa­mous, he spends 23 hours a day in soli­tary con­fine­ment. His cell, which he es­ti­mates to be 66 square feet, is a far cry from the 13,600- acre Yel­low­stone Club, where,

ac­cord­ing to some news re­ports, he reigned as a self- pro­claimed “benev­o­lent dic­ta­tor.”

When asked how he’s do­ing, Blixseth said with a grin, “It’s a great day to be alive.”

“This is re­ally a con­sti­tu­tional in­jus­tice,” he said about the le­gal saga, now in its eighth year.

The Yel­low­stone Club, founded in 1997, filed for bank­ruptcy in 2008. Blixseth was ac­cused of pock­et­ing much of a $ 375 mil­lion Credit Suisse loan to the re­sort and later gave up con­trol of the en­ter­prise to his ex- wife dur­ing their 2008 di­vorce. Its cred­i­tors are seek­ing more than $ 250 mil­lion from Blixseth.

Ac­cord­ing to its web­site, the Yel­low­stone Club is the world’s only pri­vate ski and golf com­mu­nity. A res­i­den­tial mem­ber­ship de­posit runs $ 300,000 with an­nual club dues of $ 36,000. Con­do­mini­ums cost $ 4.9 mil­lion to $ 15 mil­lion; ranches with 160 to 360 acres can range up to $ 21 mil­lion.

On Feb. 22, a judge ruled Blixseth will re­main in­car­cer­ated for vi­o­lat­ing a bank­ruptcy judge’s or­der not to sell Ta­marindo, a lux­ury prop­erty in Jalisco, Mex­ico, for $ 13.8 mil­lion in 2011, the As­so­ci­ated Press re­ported. U. S. District Judge Sam Had­don wants Blixseth to re­veal what hap­pened to the money.

“Lit­er­ally hun­dreds of thou­sands of dol­lars in dis­burse­ments made to var­i­ous Blixseth fam­i­ly­mem­bers or to en­ti­ties he owned or con­trolled have sim­ply van­ished with­out ad­e­quate or even plau­si­ble ex­pla­na­tion,” Had­don wrote in a Fe­bru­ary or­der, ac­cord­ing to the AP.

Blixseth told the Tribune his le­gal team has sub­mit­ted more than 22,000 pages of doc­u­ments but says that when­ever he com­plies with the judge’s or­der, the bar is moved higher.

Blixseth said Had­don is­sued a new or­der that greatly ex­panded the orig­i­nal or­der and gave him seven days to pro­vide the in­for­ma­tion. He says most of the doc­u­ments were with third par­ties in Spain orMex­ico.

“Ev­ery time I pro­vide ( the re­quested in­for­ma­tion) they change the re­quire­ment. It has noth­ing do with ac­count­ing.”

Blixseth was first or­dered to jail for civil con­tempt in De­cem­ber 2014. He ap­pealed to the 9th Cir­cuit Court and was re­leased. He was hauled back into court in April. He pre­sented the ac­count­ing and­was found in civil con­tempt again.

Blixseth says civil con­tempt is in­tended for one thing: To com­pel some­one to obey a judge’s or­der. “It means ‘ We’ll put you in jail, Blixseth, and when you pro­vide the ac­count­ing, we’ll let you out,’ ” he said.

His at­tor­ney, Phil Still­man, calls Blixseth’s in­car­cer­a­tion of about 11 months “an out­rage.”

“He has lit­er­ally fully com­plied with what this judge has asked him to do,” he said. “What is re­ally dis­turb­ing to me as a lawyer is not get­ting some­one to rule on the­mer­its of his is­sues.”

Blixseth doesn’t have the right to a jury trial, ar­raign­ment or bail, Still­man said. He said there is an in­def­i­nite sen­tence on the sus­pi­cion that he has the keys to his own cell if he co­op­er­ates.

He said Blixseth has never said, “I will not co­op­er­ate. All he has said is, ‘ Here it all is.’ ” THE $ 64 MIL­LION QUES­TION

At­tor­ney Kevin Bar­rett of the West Vir­ginia law firm of Bai­ley and Glasser rep­re­sents the Yel­low­stone Club Liq­ui­da­tion Trust, which is su­ing Blixseth over the club’s 2008 bank­ruptcy. He said they have a cou­ple of judg­ments against him that to­tal $ 260 mil­lion.

When asked how much of the money Blixseth still al­legedly has, Bar­rett says, “That is the $ 64 mil­lion ques­tion. We don’t knowif he has any­thing left.

“He pro­fesses to have noth­ing. Some be­lieve he has as­sets that are hid­den ei­ther in the U. S. or off­shore,” Bar­rett said. “We don’t know of any as­sets at this point.

“I think it is pretty clear he is still hid­ing in­for­ma­tion.”

Bar­rett said at­tor­neys now have lit­i­ga­tion pend­ing against two en­ti­ties Blixseth trans­ferred as­sets to and have filed le­gal ac­tion against Blixseth’s wife, Jes­sica, and mother- in- law, Cher­rill Fer­gu­son, who live in the Seat­tle area.

He said he has no sym­pa­thy for Blixseth over his in­car­cer­a­tion.

“He brought this upon him­self and con­tin­ues to bring this upon him­self ev­ery day he sits there by fail­ing to do what he needs to do by com­ply­ing with the judge’s or­der and re­fus­ing to tes­tify on the stand about what he did with the money,” Bar­rett said.

Blixseth called Ta­marindo his big­gest mis­step. “In hind­sight, I should have done amo­tion to clar­ify the sale of Ta­marindo,” he said.

Blixseth gave up con­trol of the club to his ex- wife, Edra, as part of their di­vorce set­tle­ment in 2008, or, as Blixseth calls it, “the di­vorce from hell.” MOD­EST BE­GIN­NINGS Tim Blixseth says he grew up poor.

He dis­cov­ered his knack for the art of the deal when he­was 13. He bought three don­keys for $ 25 each and sold them a few weeks later, now touted as “pack mules,” for a $ 150 profit. Af­ter high school he worked in a sawmill, then moved into buy­ing tim­ber, the mag­a­zine re­ported. He was a mul­ti­mil­lion­aire, re­tired by 40, and liv­ing in Lake Ta­hoe.

In 2006, Blixseth was ranked No. 322 out of the 400 rich­est Amer­i­cans with a net worth of $ 1.2 bil­lion.

He said he has no idea what that fig­ure is to­day.

“My big­gest prob­lem in busi­ness is that I am­not a cut­throat-Wall Street guy,” he said. “Money means ab­so­lutely noth­ing to me. It’s just a way to get through life. I’ve had plenty and I’ve had none.”

In a Nov. 27 es­say he pro­vided to the Tribune, “A Pris­oner in Amer­ica With­out Rights,” he said he wears earplugs most of the day to si­lence the screams that echo through the jail.

“Com­mu­ni­ca­tion,” he said, when asked what has been the tough­est part of his in­car­cer­a­tion, “not be­ing able to call at­tor­neys and other folks.”

“I’ve never been ar­rested or charged with a crime inmy en­tire life.”

He men­tioned his suc­cess in song­writ­ing, hav­ing co- writ­ten Heart of Amer­ica, which he says was used by NBC’s To­day show and raised as much as $ 130 mil­lion to help Hur­ri­cane-Ka­t­rina vic­tims.

Blixseth said if he wins mil­lions in a civil law­suit, he will set up a le­gal de­fense fund to pro­vide lawyers for peo­ple who have lost their con­sti­tu­tional rights.

He said they will take cases for free that “we deem to be a vi­o­la­tion of our civil rights.”

“There is no worse op­po­nent than a zealot.”

MATTHEW BROWN, AP

Tim Blixseth leaves the U. S. court­house in Butte, Mont., af­ter fac­ing ques­tions about his fi­nances in Novem­ber 2014. Blixseth was or­dered into cus­tody for civil con­tempt of court.

JU­LIA MOSS, GREAT FALLS TRIBUNE

The Cas­cade County Re­gional De­ten­tion Cen­ter in Great Falls, Mont., is Tim Blixseth’s cur­rent home. He says he has 66 square feet there.

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