BILLINGS, Mont.—A federal judge in Colorado has issued an arrest warrant for Yellowstone Club owner Edra Blixseth after she failed to show up for a Wednesday hearing, amid indications that the former billionaire could soon file for personal bankruptcy.
The Colorado case involves a lawsuit against Blixseth and son Matthew Crocker over a defaulted $13 million loan.
It comes as Blixseth struggles separately to sell off the Yellowstone Club in southern Montana after the millionaires-only resort fell almost $400 million in debt. The club’s financial problems are traced in large part to money being diverted from its operation to Blixseth and her former husband, Tim Blixseth.
Edra Blixseth was scheduled to appear in court in Colorado Wednesday for a hearing into a lawsuit by Western Capital Partners LLC. She and Crocker had co-signed for mortgages with Western Capital to finance development of several properties in Gallatin and Madison counties, including a 1,100 unit development called Story Mill.
The pair defaulted on the $13 million loan in late 2007 and again last year.
During Wednesday’s hearing, an attorney for Western Capital, Robert Hatch, told Magistrate Judge Kathleen Tafoya that Blixseth “anticipated a bankruptcy filing.” He said that’s what he had been told in an e-mail from Blixseth’s attorney.
A spokesman for Blixseth, Bill Keegan, could not immediately confirm any bankruptcy plans.
Keegan said Blixseth missed Wednesday’s hearing because she was tied up in part with an attempt to sell the Yellowstone Club for $100 million.
“She had advised the court she could not attend that hearing due to her other commitments,” Keegan said. “Why they have taken that step (of issuing a warrant) is unclear to me.”
A separate arrest warrant was issued Feb. 13 for Crocker, the principal developer of Story Mill.
Meanwhile, a federal judge in Montana overseeing the Yellowstone Club’s Chapter 11 bankruptcy case has rejected a proposal to sell the club at auction. Judge Ralph Kirscher wrote in an opinion issued Wednesday that the terms offered by the resort’s owner appeared to favor a single bidder.
Blixseth has an agreement to sell the financially strapped club to Boston-based CrossHarbor Capital barring any higher offers.
But Kirscher wrote in his opinion that the auction process proposed by Blixseth favored CrossHarbor. He said that could discourage other bids on the 13,600 acre club.
Tim Blixseth was among those who objected to the proposal. He said last week he may try to regain control of the resort at Big Sky.
