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Glasser v. Jessica T. Blixseth and Jtb, LLC

United States District Court, W.D. Washington, Seattle

October 22, 2014

BRIAN A GLASSER, AS TRUSTEE OF THE YELLOWSTONE CLUBE LIQUIDATING TRUST, Plaintiff,
v.
JESSICA T. BLIXSETH and JTB, LLC, Defendants.

ORDER

RICHARD A. JONES, District Judge.

I. INTRODUCTION

This matter comes before the court on the motion (Dkt. # 2) of plaintiff Brian A. Glasser, as trustee of the Yellowstone Club Liquidating Trust (the "Trust"), for a temporary restraining order and preliminary injunction. The Trust has served the motion and supporting documents upon defendants, Jessica T. Blixseth and JTB, LLC, along with Mr. Timothy L. Blixseth, a person alleged to be acting in concert with defendants. Dkt. # 2, p. 20-22. Defendants have not filed a response and the deadline to do so has passed. See Local Civ. R. See Local Civ. R. 65(b)(5) ("Unless the court orders otherwise, the adverse party must file its response, if any, within forty-eight hours after the motion is filed."); Local Civ. R. 7(b)(2) ("[I]f a party fails to file papers in opposition to a motion, such failure may be considered by the court as an admission that the motion has merit.").

For the reasons stated below, the court GRANTS the motion and enters a TRO with terms as stated at the conclusion of this order.

II. BACKGROUND

In the 1990s, Timothy Blixseth developed the Yellowstone Mountain Club in Montana. Dkt. 1, ¶ 1. In 2005, Yellowstone and its affiliated entities (collectively "Yellowstone") borrowed $375 million from Credit Suisse and a group of institutional lenders. Id., ¶ 2. Upon disbursement of the loan, Mr. Blixseth diverted $209 million into his personal accounts. Id., ¶ 3. Over the next few years, Mr. Blixseth transferred additional assets, valued at tens of millions of dollars, from Yellowstone to himself. Id., ¶ 4.

In 2008, Yellowstone filed for bankruptcy. Id., ¶ 8. Just before the filing, however, Mr. Blixseth created Desert Ranch LLLP ("Desert Ranch"), a Nevada limited liability limited partnership. Id., ¶ 5. He then transferred substantially all of his assets to Desert Ranch. Id., ¶ 6. The assets he transferred to Desert Ranch included his ownership interest in and the assets of another entity, Western Air & Water, LLC ("Western Air"), an Oregon limited liability company. Id., ¶ 7. Among the assets of Western Air is a 156foot yacht known as "The Piano Bar." Id. The assets of Western Air (including the yacht) are the subject of this action.

Yellowstone's creditors challenged the transfers made by Mr. Blixseth and sought to have them set aside. Id., ¶ 8. On June 2, 2009, the United States Bankruptcy Court for the District of Montana (the "Montana Bankruptcy Court") confirmed the bankruptcy plan and formed the Yellowstone Club Liquidating Trust ("the Trust") to, among other things, litigate the creditors' fraudulent transfer claims against Mr. Blixseth and the entities that he owns or controls. Id., ¶ 9. The trustee of the Trust is the plaintiff in this action.

The trustee has pursued three relevant adversary proceedings before the Montana Bankruptcy Court. Dkt. # 7. The first adversary proceeding, Case No. 08-61570-11, Adv. Proc. No. 09-14 (Bankr. D. Mont.), sought to set aside Mr. Blixseth's transfer of certain assets from Yellowstone to himself, (the "Blixseth action"). This proceeding was resolved in December 2012 and resulted in a final judgment against Mr. Blixseth for $41 million. Id., ¶ 10. That judgment remains unpaid. Id., ¶ 31.

The second adversary proceeding, Case No. 08-61570-11, Adv. Proc. No. 09-64 (Bankr. D. Mont.), sought to set aside Mr. Blixseth's transfer of a Mexican resort called the Tamarindo (the "Tamarindo action"). The resort appears to have been an asset of Yellowstone, which Mr. Blixseth transferred to himself (and his related entities). This proceeding is still pending. Id., ¶¶ 7, 14.

The third adversary proceeding, Case No. 08-61570-11, Adv. Proc. No. 10-15 (Bankr. D. Mont.), sought to set aside Mr. Blixseth's transfer of assets from himself (assets which allegedly used to belong to Yellowstone) to Desert Ranch (the "Desert Ranch action"). This proceeding is also still pending. Id., ¶ 7, 11.

After filing the Tamarindo and Desert Ranch actions, the Trust separately moved in each adversary proceeding for entry of a preliminary injunction prohibiting Mr. Blixseth from further transferring the assets subject to each of those actions. Id., ¶ 15. At that point in time, Western Air (including the yacht) belonged to Desert Ranch. Id., ¶ 13.

The Montana Bankruptcy Court entered an injunction in the Tamarindo action prohibiting the sale of the resort, but initially held that a separate injunction in the Desert Ranch action was unnecessary. Id., ¶ ¶ 16, 17. Mr. Blixseth, thereafter, violated the injunction in the Tamarindo action and sold the resort. Id., ¶ 18. He also caused Desert Ranch to transfer the assets of Western Air (including the yacht) to his wife, Jessica. Id., ¶ 21; Dkt. # 3-9, pp. 79-80.

The Montana Bankruptcy Court held Mr. Blixseth in contempt for the sale of the Tamarindo resort finding that he had engaged in "a deliberate, calculated course of conduct... in direct contravention of the [injunction]" and directed the imposition of "extreme sanctions." Dkt. # 3-6. The court ultimately ...


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