Yellowstone Club, Economy Crashes the Gates at Club for the Rich, NYT

Big Sky, Mont. -  Every town has its walls and gates — some visible, some not — for keeping things out or in. Here some of the gates are world famous. The Yellowstone Club, a cloistered and cosseted mountain retreat for the super-rich, helped define a style and an era with its creation in 1999.
By Kirk Johnson, Nov 30, 2008, New York Times

The club had 340 members with a private ski mountain only a schuss away from $20 million vacation homes. It was the corner office and the executive suite of gated communities all in one — an exemplar of exclusivity.

But the sense of refuge was an illusion. The global financial crises have stormed even these gilded confines: This month, the Yellowstone Club filed for bankruptcy protection.

“The economy caught up with them,” said L. C. Sammons, a retired physician from Memphis who lives in Big Sky just down the road from the club.

Other corners of the resort-economy West are taking punches. The Tamarack Resort in Idaho, which opened in 2004 north of Boise, is operating in receivership after the owners defaulted on a $250 million loan. Home construction has halted but the ski area is scheduled to open on Dec. 12. In Utah, the Promontory Club, a 7,224-acre ski and golf development near Park City, declared bankruptcy in March when the company defaulted on a $275 million loan.

Here in Big Sky, the Yellowstone Club’s troubles have been complicated by domestic entanglement. Tim Blixseth, the club’s founder, and his wife, Edra, divorced this year, putting the club in her control. Ms. Blixseth then filed for Chapter 11 bankruptcy protection, citing the club’s inability to restructure $399 million in debt.

“The freeze on the credit market put them in a bad place,” said Bill Keegan, a spokesman for the club. “They need to restructure their debt, and they realized it wouldn’t happen for the opening.”

To open for the season, Ms. Blixseth asked for an expedited hearing to raise cash, and Judge Ralph B. Kirscher of United States Bankruptcy Court signed an order in mid-November allowing Credit Suisse to lend the club $4.5 million to pay its debtors.

Full Article link