Founders of Yellowstone Club turn on each other

The divorced co-founders of the Yellowstone Club are waging an increasingly bitter legal fight over the remnants of their opulent empire in the wake of the club's recent sale to a Boston investor.

Tim Blixseth ran the 13,600-acre southwest Montana resort until last August, when Edra Blixseth took over following the couple's divorce. Edra blames her former husband for driving the club into bankruptcy and for spurring her own bankruptcy, which she filed in March with debts of at least $157 million.

But in newly filed documents in Edra's bankruptcy case, Tim Blixseth accuses his former wife of repeated financial fraud.

He says she tried to ruin him by scuttling a bid to sell the club last year for $470 million - more than four times the $115 million that CrossHarbor Capital Partners is now paying to acquire the property.

Tim Blixseth wrote in an affidavit that Edra had "engaged in a systematic campaign riddled with fraud, deception and illegal conduct with the singular goal of wrestling control of the (Yellowstone Club) and ruining me in all respects, at whatever the costs."

Edra Blixseth's spokesman, Bill Keegan, said she was reviewing the allegations after just receiving them on Thursday.

"It appears that Tim Blixseth is using the same harassment tactics that he has employed for some time," Keegan said. He said Edra Blixseth would comment on the allegations after the review.

Edra last week asked a federal judge in Butte for time to reorganize her financial affairs, in a bid to avoid a forced sale of her assets.

Tim Blixseth's affidavit was filed as part of a motion to block that request.

Edra Blixseth has said that as part of reorganizing her affairs, she may attempt to reopen the couple's divorce case - a move that could potentially shift some of her debts onto her former husband.

A hearing in the case is set for June 16 in Butte before U.S. Bankruptcy Judge Ralph Kirscher.

Kirscher has rejected past accusations that Edra colluded with CrossHarbor managing partner Sam Byrne to scuttle the $470 million sale of the club last year.

But he's also been circumspect about Edra's attempts to fix up her finances, citing her lack of any income and failure to keep insurance on much of her $107 million in assets. They include nine residences, a fleet of cars and more than $3 million worth of furs, art and jewelry.