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Ritzy Montana Resort Able to Stay Open

The Associated Press

HELENA, Mont. -- Montana tax officials said they are closely watching the Yellowstone Club bankruptcy proceedings.

The ritzy resort near Yellowstone National Park is going through a bankruptcy as it looks to reorganize mounting debt amid tight credit markets.

The club was even uncertain it could open this winter until a Butte bankruptcy judge this week approved another loan for the ski resort and housing development. Now the Department of Revenue wants to make sure taxes get paid.

Agency spokeswoman Cynthia Piearson said the department wants to ensure that Yellowstone Club entities will continue to collect and remit employer withholding taxes and lodging facility use taxes throughout the interim financing period.

"The Department of Revenue has appeared in the Yellowstone Club bankruptcy proceeding in an effort to protect the taxpayers of Montana," she said.

The Montana resort caters to the extraordinarily rich and features a private ski hill, multimillion-dollar homes and members such as Microsoft tycoon Bill Gates.

The bankruptcy hearing has featured a battle between two different lenders who want to get the "senior" position in negotiations by funding the club through the winter.

The court decided to let CrossHarbor Capital of Boston, Mass., lend the club $20 million at 15% interest to so that hundreds of employees could run the lavish club's operations. CrossHarbor has, in the past, tried to buy the club from Edra Blixseth, former wife of founder Tim Blixseth.

Club members, who paid a lot of money for the right to build their own expensive homes in the gated resort, and others are hoping a buyer for the club steps forward in the coming months.

U.S. Bankruptcy Judge Ralph Kirscher says it is important the club isn't forced to shut down in the meantime because turning out the lights would damage its value.