Big Sky, Montana – The Yellowstone Club, a private ski and golf resort in Big Sky, Montana, was once the epitome of ultra-rich exclusivity. It boasted members like Bill Gates and Justin Timberlake. Its spectacular collapse into bankruptcy in 2008 is a tale of greed, mismanagement, and economic fallout. Here’s a breakdown of how it happened, the fallout, intriguing facts, and the club’s current status.
How the Yellowstone Club Went Bankrupt
Founded in 1997 by timber baron Tim Blixseth, the Yellowstone Club was a 13,600-acre playground for the ultra-wealthy. It offered private ski slopes, a Tom Weiskopf-designed golf course, and homes like the $155 million Pinnacle mansion. Membership required a $250,000 initiation fee, $16,000 annual dues, and a minimum $3 million net worth. Despite its elite appeal, the club’s financial foundation was shaky.
The fatal blow came in 2005 when Tim and Edra Blixseth secured a $375 million loan from Credit Suisse. They used the club’s assets as collateral, despite assurances to members that the club would remain debt-free. Court documents later revealed that $209 million of this loan was diverted to the Blixseths’ personal accounts. It funded lavish purchases like a $28 million French chateau, a $40 million Mexican resort, a $28 million Caribbean island, and a $40 million Scottish golf retreat for a failed venture called Yellowstone Club World. This left the club with a crushing $343 million debt load.
By 2007, cash flow issues emerged due to heavy debt servicing, profligate spending, and erratic management. The Blixseths’ divorce added fuel to the fire, with Edra gaining control of the club—and its debts—while Tim walked away. A proposed $455 million sale to CrossHarbor Capital Partners fell through in 2008 amid the global financial crisis. The crisis tightened credit markets and decimated the luxury real estate market. With only $40,000 left in its accounts, the Yellowstone Club filed for Chapter 11 bankruptcy in November 2008.
The Fallout
The bankruptcy was a spectacle of legal battles and financial reckoning:
- Creditors and Lawsuits: The club owed $343 million, including $307 million to Credit Suisse. Members like cyclist Greg LeMond sued the Blixseths, alleging they were cheated out of their investments. LeMond settled for $39.5 million, though Edra only paid $8 million before her own bankruptcy.
- Tim Blixseth’s Liability: A federal judge ruled in 2010 that Tim’s “self-dealing” and “deception” caused the bankruptcy, ordering him to repay $286.4 million to creditors. He was later jailed for 15 months for contempt after hiding assets, including a yacht and private jet, to avoid payments. He settled with the Yellowstone Club Liquidating Trust for $3 million in 2016.
- Credit Suisse’s Role: Bankruptcy Judge Ralph Kirscher criticized Credit Suisse for “predatory lending,” stripping them of their first-lien status. The bank settled for an $80 million note, a fraction of their $310 million claim.
- Economic Impact: The bankruptcy threatened 550 jobs and local suppliers. A $20 million interim loan from CrossHarbor kept the club operational during the 2008-2009 ski season.
- Asset Sales: Edra’s 30,000-square-foot Porcupine Creek estate was sold to Larry Ellison for $42.9 million in 2011. Other international properties were liquidated to cover debts.
Interesting Facts
- A-List Members: The club attracted high-profile names like Bill Gates, Dan Quayle, and later, Justin Timberlake, Ben Affleck, and Mark Zuckerberg (rumored). Its exclusivity was built on “Private Powder” and runs named “Learjet Glades” and “Ebitda.”
- World’s Most Expensive Home: The Pinnacle, a 53,000-square-foot mansion with a 30-car garage and 8,000-bottle wine cellar, was marketed for $155 million but never sold due to the bankruptcy.
- Blixseth’s Spending Spree: Tim’s purchases for Yellowstone Club World included a $44 million Gulfstream jet and a $400,000 Rolls-Royce, epitomizing the excess that led to the collapse.
- Judge Kirscher’s Stand: The Montana judge’s bold rulings earned praise for delivering “rough justice.” These include prioritizing unsecured creditors (vendors, workers) over Credit Suisse, which were rare in bankruptcy court.
- Cultural Critique: The bankruptcy highlighted the excesses of the pre-2008 credit boom. Critics argued the club’s model—catering solely to the ultra-rich—was unsustainable. It lacked the social vibrancy of public resorts.
Current Status
The Yellowstone Club emerged from bankruptcy in July 2009 under new ownership by CrossHarbor Capital Partners, led by member Sam Byrne. He purchased it for $115 million—a steal compared to the $400 million valuation a year earlier. Since then, the club has rebounded:
- Financial Recovery: By 2014, the club had no remaining bankruptcy debt, positive cash flow, and doubled its membership to over 500 households.
- Expansion and Partnerships: In 2013, CrossHarbor partnered with Boyne Resorts to acquire the bankrupt Spanish Peaks and Moonlight Basin resorts. They consolidated these resorts with Big Sky Resort to create a massive ski terrain network.
- Continued Exclusivity: Today, the club spans 15,200 acres, offering 2,900 acres of skiable terrain, an 18-hole golf course, and luxury real estate. Membership now reportedly requires a $400,000 initiation fee and property ownership within the club.
- Celebrity Appeal: Recent reports suggest stars like Taylor Swift and Travis Kelce spent July 4th, 2025, at the property. This reinforces the club’s status as a celebrity hideaway.
