Federal appeals court denies Yellowstone Club founder's release from jail

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HELENA, Montana — A federal appeals court has denied a third emergency petition to release the founder of Montana's Yellowstone Club from jail, meaning former billionaire Tim Blixseth will likely be detained until an October hearing concludes.

The Medina, Washington, resident has been held in the Great Falls jail since April 20 on a judge's civil contempt order. U.S. District Judge Sam Haddon said Blixseth had not followed his order to account for $13.8 million from the 2013 sale of a Mexico resort that was part of a bankruptcy proceeding.

Blixseth said all of the details from the Tamarindo resort sale are in the 9,000 pages of documents he previously turned over to the judge. Earlier this month, Haddon ruled the documents could not be accepted as reliable without careful scrutiny, and set a trial-like hearing on Oct. 19 to decide whether Blixseth has accounted for the sale proceeds.

The judge ordered Blixseth to remain in the Cascade County Detention Center until then.

Blixseth filed an emergency petition with the appeals court, his third, saying his continued detention is unconstitutional. In response, Haddon wrote a report to the three-judge appellate panel that said Blixseth remains in civil contempt and holds the keys of his prison cell "in his own pocket" — he just has to prove that he has accounted for the sale.

The appellate judges said in their ruling Wednesday that the 9th U.S. Circuit Court's intervention isn't warranted.

Blixseth "may secure his release by providing an accounting that clearly shows the disposition of the proceeds of the sale of the Tamarindo Resort," the order read.

Blixseth had been ordered not to sell assets while the Yellowstone Club's 2008 bankruptcy was pending. The club north of Yellowstone National Park went bankrupt and was sold in 2008, and its creditors say Blixseth owes them $286 million that he took from the club for personal use.

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