Blixseth's MT bankruptcy lawyer says he's staying

BILLINGS, Mont. - The attorney for Yellowstone Club co-founder Edra Blixseth said Tuesday that he will continue to represent his client — rejecting accusations the pair may have destroyed or concealed computer documents related to her bankruptcy case.

The allegations were leveled in U.S. Bankruptcy Court in Butte on Tuesday by Blixseth's ex-husband, Tim, and a creditor she owes more than $13 million.

U.S. Bankruptcy Judge Ralph Kirscher said there was "no factual establishment" for the claims. He described them as "merely allegations."

"But I caution everyone, that you know what I expect and the law requires," Kirscher added. "I take a dim view of destruction" of evidence.

The Blixseths founded the Yellowstone Club in the late 1990s. Their bitter divorce last year precipitated the financial collapse of the millionaires-only resort, which has a private ski hill about 50 miles south of Bozeman.

The club is being sold to Boston-based CrossHarbor Capital Partners in a deal expected to be finalized this week.

At Tuesday's hearing in Edra Blixseth's personal bankruptcy case, Tim Blixseth and Denver-based Western Capital Partners sought to block a motion by her attorney, Gary Deschenes of Great Falls, to drop the case. They said Deschenes may have been involved in withholding a laptop computer and erasing e-mails related to Edra Blixseth's bankruptcy.

Deschenes rejected the allegations of possible wrongdoing and said he had sought to get out of the case because "I cannot work for free." He later asked the judge to vacate his motion and said he would continue to represent his client.

The computer and related documents had been in the possession of Edra Blixseth's bookkeeper and were among items requested by creditors in her bankruptcy case.

Those creditors are attempting to unravel a vast and sprawling fortune that stretched across several states and included multiple houses and cars and extensive collections of art, jewelry and furniture.

Edra Blixseth has acknowledged debts of up to $357 million.

The deal to sell the Yellowstone Club to CrossHarbor, which is run by club member Sam Byrne, would bring in $115 million. That money will go to the club's creditors, not the Blixseths.

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