BILLINGS, Mont. – A federal judge has rejected a call for sanctions against the founder of a Montana resort for the ultra-rich who refused to leave his jail cell for a deposition, attorneys in the case said Monday.
Yellowstone Club founder Tim Blixseth of Medina, Washington state, has been in a Montana jail since April. That’s when a judge held him in contempt for not disclosing what happened to part of the fortune he acquired after diverting funds from the private ski and golf club near Yellowstone National Park for his personal use.
On Dec. 7, Blixseth refused to come out of his jail cell in Cascade County for a previously scheduled deposition, attorneys for the club’s remaining creditors said in court documents. They asked U.S. District Judge Richard Jones to force Blixseth to appear for the deposition and repay them more than $31,000 in legal expenses.
Jones ruled against sanctions during a Monday hearing, but said Blixseth must make himself available for a future deposition scheduled later this month.
Blixseth attorney Paul Brain said his client had no obligation to appear for the earlier deposition, which was part of a lawsuit targeting the assets of Blixseth’s wife, Jessica.
“These guys simply failed to properly compel Tim’s appearance,” Brain said. “He had no obligation to appear because he never was served a subpoena for the deposition.”
Blixseth gave up control of the Yellowstone Club during his 2008 divorce from ex-wife Edra Blixseth. The resort, with its private ski hill and an exclusive membership that includes Microsoft’s Bill Gates, soon spiraled into bankruptcy.
Its creditors say Blixseth owes them more than $250 million after draining the club’s coffers prior to giving up control. The Yellowstone Club later was sold and is under new ownership.
How long Blixseth will remain in jail is uncertain. His attorneys contend he was unfairly incarcerated, but the club’s creditors counter that Blixseth has yet to come clean on his sale of a Mexico resort in violation of a federal bankruptcy judge’s order.
A trial in the dispute was held in October. A ruling is pending from U.S. District Judge Sam Haddon.