BILLINGS, Montana — An attorney for the jailed founder of a Montana resort for the ultra-rich asked an appeals court on Friday to release his client because his incarceration was unwarranted.
Tim Blixseth, 64, a one-time billionaire and the founder of the Yellowstone Club, was jailed Monday after being found in contempt by U.S. District Judge Sam Haddon for not turning over details of a $13.8 million property sale in Mexico.
The Yellowstone Club went bankrupt in 2008 — right after Blixseth gave up control of the private ski and golf resort near Big Sky that boasts a $300,000 entry fee.
Creditors have judgments against Blixseth for more than $250 million that authorities say he and his ex-wife, Edra, drained from the club for personal use. Those judgments, which Blixseth has so far avoided paying, include the proceeds from the Mexico property, sold in 2011 in defiance of a bankruptcy judge's order.
Blixseth attorney Philip Stillman asserted that Haddon "ambushed" his client with a pre-written incarceration order during a Monday hearing in Helena. An emergency petition filed by Stillman with the 9th U.S. Circuit Court of Appeals requested Blixseth's immediate release.
Haddon "sprung this order at the end of the hearing so there was no opportunity to address specific concerns the court had," Stillman said Friday. "This is punitive. Judge Haddon wants him in jail to punish him...How does the court believe Tim can comply with his order from a jail cell?"
Blixseth, of Medina, Washington, was being held at the Cascade County Regional Detention Center in Great Falls. He was jailed for a week in December over the same issue.
Stillman said his client has submitted 8,000 pages of financial records and other documents and should have been given advanced notice of the court's remaining concerns about what happened to the money from Mexico. More than 200 pages were submitted last weekend, drawing criticism from Haddon as a last-minute "document dump."
The judge said Blixseth had relied on secondhand or hearsay-type information and did not provide records from his personal bank account.
The trustee for the club's remaining creditors said the documents produced so far confirm that Blixseth spent the money from the sale of Tamarindo resort in the Mexican state of Jalisco to support his family's lavish lifestyle and to pay for his legal defense.
That includes $2 million that he transferred to another company, whose only assets were private aircraft, a 156-foot yacht and a 58-foot fishing boat; nearly $42,000 a month for his wife's personal expenses and trips to Italy, Greece, France and Turkey with members of his family.