Timothy Lee Blixseth (born 1950) is an American real estate developer, record producer, songwriter and timber baron.Former timber baron Blixseth goes on trial, accused of 'looting' $286M from Yellowstone Club, Minneapolis Star Tribune, February 23, 2010. He was a co-founder of the Yellowstone Club in Montana. In 2006, Blixseth was featured in the Forbes 400 List of wealthiest Americans with a net worth of $1.3 billion. However, based on court records from his 2009 divorce, news reports estimated his 2011 net worth to have dropped to $200 million.Ex-billionaire to seek sanctions, Seattle Times, May 18, 2011. By 2012, he faced a forced bankruptcy for failing to pay the state of Montana $57 million in income taxesCourt: Montana can pursue resort founder Tim Blixseth into bankruptcy, by The Associated Press, The Oregonian, December 18, 2012. and in 2014 he told the courts he was "too poor" to pay pending judgments and contempt findings for his fraud role9th Circ. Upholds Contempt For Bankrupt Ski Club's Founder, by Jeff Sistrunk, Law360, October 9, 2014. in the Yellowstone Club bankruptcy.Blixseth - Ninth Circuit Bankruptcy Appellate Panel Rules Nevada Is Proper Venue For Involuntary Bankruptcy Against Former Billionaire Because Holding Companies Formed There, by Jay Adkisson, Forbes Magazine, December 30, 2012. Tim Blixseth claims he's too broke to comply with court order in continuing battle over Yellowstone Club, by Jeff Manning, The Oregonian, December 18, 2014.
Blixseth's wealth and assets have been the subject of controversy.Blixseth fraud trial court seeks assets and answers, New West, February 25, 2010. In 2008, the bankruptcy of the Yellowstone Club led to extensive litigation with Blixseth and his creditors.Yellowstone Ski Resort for Super Rich Files Bankruptcy, Fox News, November 12, 2008. The property emerged from bankruptcy under new ownership in 2009.
Early life and education According to Blixseth, he "grew up on welfare in Roseburg, Oregon".Tim Blixseth asks judge to punish tax officials, will donate all punitive damages to legal aid, Tim Blixseth Press Release - PRNEWS Wire, June 2, 2011 He attended Roseburg High School (Class of 1968) and after graduating, he worked in a sawmill.Cohan, William Paradise Lost, Forbes Magazine, February 6, 2008. His parents were members of "a local cult" called Jesus Name of Oneness.
Career Blixseth began his business career using land swap deals and federal timber contracts.Here's how Blixseth did it, Bozeman Chronicle, April 12, 2008
Timber Following bankruptcies in 1981Tim Blixseth, Twisted saga of a former billionaire, Property & Wealth Magazine, December 2011 and 1986, Blixseth began to rebuild his timber business endeavors. In 1988, he co-founded Crown Pacific, LTD with Peter Stott and within a year he had $44 million in sales.Montana's members only mountain, Oregonian, March 18, 2001
During this time, Blixseth was involved with three Oregon companies that defaulted on 22 national timber sale contracts owed the U.S. Forest Service more than $8 million. Two of Blixseth's timber companies, Capital Veneer and Capital Log Sales, filed for bankruptcy with debts totaling more than $16 million. A third company, Little River Box Co., was dissolved following two federal contract defaults.Crown Pacific deals its way into county timber market, The Bulletin (Bend, DeChutes County, Oregon), December 2, 1988. By 1992 Blixseth had sold his interests in Crown Pacific and launched Big Sky Lumber in Montana.
In 1995 Blixseth's Big Sky Lumber sold another to the U.S. Forest Service for $16.4 million and then swapped the remaining in checkerboard layout for contiguous and an additional $25 million. Following this final sale and swap, Blixseth dissolved the Big Sky Lumber partnership and divided up the proceeds, keeping and tens of millions in cash for himself. The cash and new acres became the foundation for Blixseth's Yellowstone Club project. Blixseth with Pittsburgh financier James J. Dolan also started the Spanish Peaks development, a high-end but somewhat less exclusive resort on neighboring property to the Yellowstone Club with land from the swap deal.The $100 million house the Blixseth built, Bozeman Chronicle, April 15, 2008. Spanish Peaks announced it was closing and filing for bankruptcy in 2011.Spanish Peaks closes, employees laid off, Bozeman Chronicle, October 10, 2011. Between sales to timber interests, developers and the U.S. government, Blixseth's team grossed $56.9 million and of prime development real estate valued at over $100 million in less than three years from the date of their initial $27.5 million investment, of which Blixseth reportedly put less than $3 million.
Yellowstone Club, Greg LeMond and Credit Suisse controversy
With cash and land from his 1995 deal with the U.S. Forest Service, Blixseth began development of of pristine Montana real estate outside of Big Sky. Blixseth said to a Montana Bankruptcy court as "I started the club with a pick-up truck and a hammer."Tim Blixseth defends Yellowstone Club deals, New West, April 29, 2009.
In 2005, they took in over $200 million from the sales of building lots and memberships to wealthy business leaders, media icons and celebrities. Early Club members and investors included Bill Gates, Mary Hart, Dan Quayle and Steve Case.The most expensive private clubs, Forbes, September 1, 2005. Leading to the Club's eventual financial failure was Blixseth's dealings with cyclist Greg LeMond. In 2002 LeMond, with four other family members and associates, invested in the Yellowstone Club."That’s Tim as in timber" Denver Westword News, 12 January 1994 Each of the five partners paid Blixseth $750,000 for one percent shares in the exclusive resort. LeMond also purchased several building lots and maintained a property at the resort. LeMond and partners sued Blixseth in 2006 following reports of a Credit Suisse loan to the resort of $375 million from which Blixseth reportedly took $209 million in a disputed partial payout for his ownership stake. Blixseth said he used the money to expand the Yellowstone Club into the Yellowstone World Club. In 2006 Blixseth told the New York Times that he "paid cash, with no help from investors, for each of the properties that make up the Yellowstone World Club."Club Med for the Multimillionaire Set, by Susan Dominus, New York Times Magazine, March 5, 2006.
The Credit Suisse loan was based on a $1.16 billion Cushman & Wakefield valuation of the resort and for which LeMond and partners each sought $11.6 million for their one percent shares."LeMond claims he was swindled on Montana’s millionaire mountain" Bloomberg News, 27 October 2006 LeMond settled his suit with the Blixseths for $39 million in 2007."Greg LeMond ‘s lawsuit with exclusive club settled," "USA Today", 15 August 2008"LeMond continues long legal fight with Yellowstone Club" New West, 21 November 2008
Blixseth appealed several aspects of the Yellowstone Club bankruptcy. The judge found Blixseth's claims unconvincing, noting, "Given the evidence, Blixseth's arguments are without support"Judge: Blixseth responsible for Yellowstone Club collapse, New West, August 18, 2010 and on March 6, 2013 U.S. District Court Judge Sam Haddon denied Blixseth's final appeal noting his lack of standing to revisit his rejected claims of "bad faith" in the bankruptcy reorganization."In RE: Yellowstone Mountain Club, Timothy Blixseth Appellant, Case 2:11-cv-00071-SEH, Document 26, Filed 03/06/13 United States District Court Montana. In December 2013 Judge Haddon ruled Blixseth in contempt for committing fraud and deception against the Court after it was revealed that in 2011 he had illegally sold-off assets frozen by an earlier court order to cover judgments against him in the Yellowstone Club bankruptcy proceedings.Tim Blixseth in contempt for selling Mexican resort, judge says, Associated Press, December 31.2013.
Software
In 2006 the Blixseth's partnered with a computer software designer Dennis L. Montgomery, former Microsoft executive Michael SandovalAtigeo at issue in divorce settlement, by Brier Dudley, Seattle Times, June 26, 2008. and former Congressman Jack Kemp to sell software they claimed could recognize patterns and objects hidden in video streams. They invested in several companies named Blxware, xPatterns, and OpSpring, and promoted their technology to the U.S. government as being able to identify hidden messages from Al-Qaeda terrorists in Al Jazeera broadcasts and find terrorists in pictures taken by CIA predator drones.Yellowstone Club Chronicles: The Edra Blixseth Bankruptcy, by Jonathan Weber, New West, June 11, 2009.
According to the New York Times, Mr. Kemp used his friendship with Vice President Dick Cheney to set up a meeting in 2006 at which Mr. Kemp, Montgomery and Ms. Blixseth met with a top Cheney adviser, Samantha Ravich, to talk about expanding the government's use of the Blxware software. Blixseth reportedly sought to sell the software to the government for $100 million; however, investigations later revealed it to be a "hoax" with CIA officials reporting they knew the technology to be fake as early as 2003.Hiding Details of Dubious Deal, U.S. Invokes National Security, by Eric Lichtblau and James Risen, New York Times, February 19, 2011.
The software was reportedly responsible for false terror alerts which grounded international flights and caused Department of Homeland Security Secretary Tom Ridge to raise the government's security level.Programmer conned CIA, Pentagon into buying bogus anti-terror code, Wired Magazine, December 28, 2009. In February 2006, the FBI opened an economic espionage and theft of intellectual property investigation. The U.S. Air Force office of Special Investigations also investigated.Nevada company's troubles, Las Vegas Review Journal, June 7, 2009 Bloomberg news reported that Blixseth family attorney Michael Flynn represented Edra Blixseth, Montgomery and Blxware against various charges until he claimed he learned the software "was a sham,"Yellowstone Club Divorcee Entangled in Terrorist Software Suits, by Anthony Effinger, Bloomberg, August 29, 2008. characterized Montgomery as a "con man" and quit.US regretting dubious deal with computer programmer, Boston Globe, February 20, 2011.
Songwriting "Heart of America" is a charity single written by Blixseth and his wife, Edra Blixseth.Club Med for the millionaire set, by Susan Dominus, New York Times Magazine, March 5, 2006. The song became the anthem for the Today TV show's "Make a Difference" campaign to benefit the victims of 2005's Hurricane Katrina.Ward, Leah (Oct 23, 2005) Considerable land swap in the works, Yakima Herald-Republic The song was recorded by Wynonna Judd, Michael McDonald, and Eric Benet., Accessed October 2011. In June 2006, Ebony magazine reported the song had raised $41 million with projected revenues of $100 million.Kinnon, Joy Bennett (June 1, 2006) Eric Benet's voyage for India: singer-songwriter is balancing stardom and fatherhood., Ebony, ("It is estimated that the project will raise $100 million to benefit victims of Hurricane Katrina. To date, $41 million has been raised") In August 2006, The Desert Sun reported the song had generated $127 million in revenues for hurricane-relief charities.Downs, Maggie (Aug 6, 2006) Blixseth's tune raises $127 million for ongoing hurricane relief efforts, The Desert Sun, August 30, 2006.
Litigation, bankruptcies and defaults