By John ClarkMay 24, 2011
The co-founder of the Yellowstone Club for millionaires said he will pursue court sanctions against the Montana Department of Revenue, after winning dismissal of an involuntary bankruptcy petition filed by the state.
A successful petition would have forced former billionaire Tim Blixseth to liquidate his assets to pay Montana $57 million in alleged unpaid taxes. However, the case was thrown out in a Las Vegas bankruptcy court after the judge ruled that Blixseth did not have any tangible assets in Nevada, making it an improper venue to try the case.
The Yellowstone Club filed for Chapter 11 bankruptcy protection in 2008 and still faces a $40 million civil judgment related to the filing. There is also an outstanding case against Blixseth from the Montana State Tax Appeals Board.
Authorities claim that Blixseth got the money to finance the private ski and golf club from a 2005 Credit Suisse loan that he reportedly used to fund his lavish lifestyle. Montana officials argue that the money should have been counted as income on which Blixseth owed taxes.
According to The Associated Press, Blixseth said that years ago the Internal Revenue Service ruled that the Credit Suisse money was a legitimate loan to the Yellowstone Club, and insists any additional liabilities were the responsibility of his wife Edra, who took control after they divorced in 2008.