BILLINGS – Three-time Tour de France winner Greg LeMond and his in-laws plan to bid on a large parcel of land in the heart of Montana’s ultra-posh Yellowstone Club, a move that could spark a bidding war with the club’s new owners.
The 160-acre tract is tucked between a private ski hill and golf course at the millionaires-only resort near Yellowstone National Park.
Its price was once pegged as high as $56 million, but club owner Sam Byrne and CrossHarbor Capital Partners have a tentative deal to get it for only $8.5 million. The property includes two houses but is considered more valuable for its development potential.
Owner Edra Blixseth, who founded Yellowstone Club with former husband Tim, must sell the so-called “Family Compound” after falling into bankruptcy last year.
The wrangling over the property is the latest twist in a widely publicized saga involving the Yellowstone Club’s rise to prominence and its 2008 bankruptcy.
After opening in 2000, the exclusive enclave quickly gained a reputation for extravagance and excess, with homes worth tens of millions of dollars and an A-list membership that included Microsoft Corp.’s Bill Gates and Los Angeles Dodgers owner Frank McCourt.
But when the real estate market crashed, the club was saddled with enormous debt stemming from a $375 million Credit Suisse loan the Blixseths took out in 2005. They diverted most of the money to other ventures, and soon after their 2008 divorce, the club went bankrupt.
CrossHarbor, which had already invested more than $200 million in real estate at the club, successfully offered $115 million to take over the operation last year. Yet Edra Blixseth still held a significant stake in resort real estate — and in a location that could be key to reviving the club’s real estate sales.
One of LeMond’s attorneys, John Shaffer, announced the cycling superstar’s interest in the property at the end of a Friday hearing in U.S. Bankruptcy Court in Missoula.
LeMond and in-laws David and Sacia Morris own homes at the 13,600-acre resort and were among its original members. In 2006, they sued Edra and Tim Blixseth for cutting them out of profits related to the Credit Suisse loan, eventually settling for $39.5 million.
But some of that settlement is still outstanding, and the LeMond parties hold a $13.5 million lien on the Family Compound.
CrossHarbor, which lent Edra Blixseth millions when she was still in control of the club, also holds $35 million in liens on the property.
Because of those liens, the trustee for Blixseth’s estate, Richard Samson, said he has made no attempt to market the property.
Samson has asked U.S. Bankruptcy Judge Ralph Kirscher to approve a plan for the property that would result in an $8.5 million sale to CrossHarbor if no other bidders stepped forward.
LeMond’s attorneys criticized the trustee for striking a deal with CrossHarbor that they said significantly undervalues the property.
“How do you expect interested parties to know this is for sale?” Shaffer asked the trustee during a court hearing Friday.
Samson responded that there was no equity in the property over and above the liens. That means only CrossHarbor and the LeMond party would stand to gain from any purchase.
“The economy, the real estate in that area took a hit in 2008 and again in 2009,” he said. “Initially, I did not think there was any equity in that property.”
Court documents show Edra Blixseth owes CrossHarbor at least $43 million.
Shaffer asked Kirscher to delay the sale process for 120 days while LeMond and his in-laws work on their bid. The judge said he would consider the request but made no ruling.