SAM Magazine-Butte, Mont., May 18, 2009-CrossHarbor Capital Partners today won ownership of the Yellowstone Club resort after reaching a settlement deal with the club's primary lender, Credit Suisse, according to NewWest.net. The settlement ends a six-month legal battle that began when the Club filed for bankruptcy protection in November.

U.S. Bankruptcy Judge Ralph B. Kirscher approved the settlement today. However, final approval of the club's Chapter 11 bankruptcy reorganization, which will incorporate the settlement, is perhaps a week away, as the court still has a variety of comparatively minor details to resolve, New West reported.

According to the agreement, Cross Harbor will pay $115 million in cash and debt for the Club, provide a $15 million fund for trade creditors, and supply up to $75 million in working capital.

The Credit Suisse lender group, which is owed $310 million by the Club, will receive a new note for $80 million and may receive additional proceeds from a so-called "liquidating trust" and from the sale of a French chateau purchased by Tim and Edra Blixseth, the Club's former owners.

The settlement also includes a total of $19 million to pay all unsecured creditors other than club insiders. Club restructuring officer Ron Greenspan said that he expected this amount would be enough to pay all claims in full, according to New West.

Credit Suisse was motivated to reach a settlement after Judge Kirscher ruled last week that the bank's behavior in crafting the Club's $375 million loan was "predatory" and "shocked the conscience" of the court. The ruling subordinated the Credit Suisse lender group's secured claim to those of unsecured creditors, and thus took away the leverage Credit Suisse would normally have had as the first lien holder on the club's assets. The settlement drops the claims against Credit Suisse, and the bank avoids what could have been "a highly negative final ruling," New West notes.

Club founder and former owner Tim Blixseth was not party to the settlement agreement, and could well face further litigation on a variety of fronts. \

• Previous
  NSAA Releases Skier Visit Numbers
• Next
  Skiing Accident Highlighted in Lawsuit Abuse Ads