Nestled in the heart of the world’s only private ski and golf community, the 160-acre Family Compound is without question the most unique offering ever presented in the history of the Yellowstone Club. The story of the property dates to the founding of the club itself when Tim and Edra Blixseth retained ownership of a 160-acre site inside its boundaries. The couple built two 2,240-square-foot, 3-bedroom residences that were to serve as guest homes for a main residence that was never constructed.

Situated at the end of a long, secluded driveway, each of the cabins features an open floor plan, vaulted ceilings, massive wood-burning fireplaces, and large floor-to-ceiling windows. Beautifully appointed bathrooms and well-designed kitchens round out the interiors, while an expansive outdoor living area creates an ideal setting for nights out beneath the Montana sky. Yellow Mule Creek runs year round through the property’s western boundary.

It is this acreage and improvements that are to be auctioned by Edra Blixseth’s bankruptcy estate pursuant to a court-approved bidding and auction process. CrossHarbor Capital Partners has tendered a stalking horse bid of $10,850,000, consisting of $850,000 in cash and $10 million in a credit bid against CrossHarbor’s lien on the Family Compound. Per the court’s order, the minimum required for qualified competing bids by third parties is $11.1 million. Deadline for submission of the $11.1 million is 4:30 p.m. Mountain Time on May 16. The receipt of qualified competing bid(s) will result in an open outcry auction to be held at 9:00 a.m. Mountain Time on May 20, 2011 at the offices of Datsopolous, MacDonald and Lind in Missoula, Montana.

Membership to The Yellowstone Club is not included as part of this offering. The buyer may apply to The Yellowstone Club for membership, however, membership is not guaranteed. Independent investigation is advised. Additional information about the auction and the rules governing competing bids will be made available upon request.

To obtain a due diligence package and schedule a private viewing of the Family Compound at Yellowstone Club, please contact:

Bill McDavid
Hall and Hall
406-542-3762
mcdavid@hallandhall.com

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CrossHarbor Capital Partners LLC paid $115 million to buy Montana’s Yellowstone Club out of bankruptcy court yesterday. The Boston-based private-equity firm agreed to pay $35 million in cash and assume $80 million in debt owed to Credit Suisse. CrossHarbor will also infuse up to $75 million in working capital.

CrossHarbor’s principal, Sam Byrne, is a Yellowstone Club member, and has been closely following its fortunes. In 2008, CrossHarbor attempted to acquire the club for $450 million.

According to the Bozeman Daily Chronicle, the sale capped a week of non-stop negotations in the court of federal bankruptcy Judge Ralph Kirscher. The only other bidder was Credit Suisse, which in 2005 loaned $375 million to Tim and Edra Blixseth, the now divorced couple who jointly founded the club.

As part of the final deal, Credit Suisse will be allowed to co-invest in the club with CrossHarbor. Credit Suisse also received additional assets, including Yellowstone Club real estate and a castle in France that the Blixseths had acquired. Unsecured creditors were recognized by the court as $19 million was set aside to pay local vendors, tradesmen, and others.

This marks the second major bankruptcy ruling in as many months involving Credit Suisse. In April the Promontory Club outside of Park City, Utah, sold to the Pivotal Group for $30 million. Credit Suisse had put together a $350 million loan package for Pivotal, which it used to develop the resort community before seeking bankruptcy protection.

According to the CrossHarbor website, the LLC “is an active investor in the distressed securities market. We invest in a wide variety of securities including real estate loans, corporate loans, and structured securities that are suffering from stress including monetary and/or technical defaults.”

Read more at:
“Cross Harbor Wins Yellowstone Auction,” Bozeman Daily Chronicle, May 18, 2009.

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As far as backstory goes, no one knows it better than the fine folks at New West. Based out of Missoula, these guys describe themselves as “a next-generation media company dedicated to the culture, economy, politics, environment and lifestyle of the Rocky Mountain West,” and they’ve been on this story from day one. Although this report is three weeks old, it goes into great detail about the financial woes, the legal wranglings, and the principal players.

The New York Times has also been regularly reporting on the Yellowstone Club, and this weekend it continued its coverage with an article that gives a more regional perspective on the boom-and-bust cycle surrounding the entire enterprise. It’s especially worthwhile to notice that the writer picked up on several of the other recent resort bankruptcies, including one we covered: Park City’s Promontory Club.

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The world’s only private ski and golf community has sought bankruptcy protection. The Yellowstone Club, an exclusive 13,400-acre retreat in Montana’s Gallatin Mountains whose members include Microsoft cofounder Bill Gates and former vice president Dan Quayle, filed for Chapter 11 bankruptcy protection in federal bankruptcy court yesterday.

It wasn’t too long ago that the Yellowstone Club was making headlines of a different sort. Just last year it announced the construction of the world’s most expensive residence, a $155-million monstrosity whose 53,000-square-foot mansion sat on 160 acres and featured a private ski lift. Its extravagance, A-list clientele, and gorgeous setting made the club a media darling. Its website features links to articles in the Robb Report, Conde Nast Traveller, and The New York Times Magazine.

But a string of bad news has plagued the club’s founders, Tim and Edra Blixseth, who rank No. 33 on The Land Report 100 with estimated landholdings of 213,895 acres, including 180,000 acres of former Boise Cascade land in Idaho.

In August the club paid $39.5 million to settle a lawsuit brought by a group of members, including Tour de France winner Greg LeMond, who alleged that the Blixseths had tried to buy out their stake in the club for less than its true value. The Blixseths themselves have recently divorced. And, on Monday, the club announced that it had been unable to secure financing arrangements with its creditors and bondholders. It plans to reorganize its finances and emerge from bankruptcy “as soon as possible,” the statement said.

According to the Associated Press, the move comes two months after the club announced an ambitious expansion plan in conjunction with Arizona-based Discovery Land Co.

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