By Jacqueline Palank
Wall Street Journal
Owning a resort in Mexico isn’t supposed to be stressful. But instead of spending his days sipping cerveza and relaxing on la playa, Timothy Blixseth faces a lawsuit over his Mexican beachfront getaway.
Blixseth, the founder and former owner of the luxury ski and golf resort near Yellowstone National Park called Yellowstone Club, is the target of a new lawsuit seeking to recover the El Tamarindo resort on Mexico’s Pacific Ocean coastline or the resort’s value of at least $40 million.
The lawsuit, filed last week on behalf of Yellowstone Club’s creditors, relies on the bankruptcy law provision that allows the reversal of certain company transactions with insiders that occurred within one year of the bankruptcy filing. According to the suit, a Yellowstone Club affiliate transferred its ownership of El Tamarindo in August 2008, just a few months before the club’s November 2008 Chapter 11 bankruptcy filing.
Through the multi-step deal, Blixseth took over control of the two companies that owned the resort. Not only did the Yellowstone Club affiliate not receive reasonable value for the deal in the form of a $39.995 million note and a $5,000 cash component that was never paid, but the lawsuit also alleges that the transfer was intended to “hinder, delay or defraud creditors.”
Blixseth, whose lawyer wasn’t immediately available to comment Tuesday morning, won control of El Tamarindo as part of the divorce settlement with ex-wife Edra Blixseth that took effect last year. The resort, located between Puerto Vallarta and Acapulco, was meant to be part of the worldwide destination club that the Blixseths sought to launch in happier (and wealthier) times.
El Tamarindo boasts three private beaches, a location within a 2,040-acre nature reserve that guests can tour and an 18-hole golf course that the resort’s golf director told Executive Golfer magazine offered the perfect skinny-dipping spot at the 12th hole.
UPDATE: We heard from Tim Blixseth’s lawyer, Michael J. Flynn: ”The lawsuit is completely frivolous. It’s part of this ongoing cabal of a few individuals involving his yet angry, vicious ex-wife Edra Blixseth trying to attack her ex-husband and it’s about acrimony in a divorce action and the sequel to that acrimony all spawned by Edra Blixseth.”
http://blogs.wsj.com/bankruptcy/2009/09/08/oh-mexico/?mod=rss_WSJBlog?mod=law&FORM=ZZNR
