Millionaires-only mess

By Nick Gevock - 02/22/2008

Three-time Tour de France champion Greg LeMond is pictured above in Dillon district court Thursday. LeMond was in court with his lawyers concerning the settlement of his lawsuit against the millionaires-only Yellowstone Club at Big Sky.

DILLON — Lawyers on both sides of a bitter legal fight between former cycling star Greg LeMond and the private Yellowstone Club reached an agreement in court here Thursday to settle the case over a business dispute.

Lawyers for LeMond, a three-time Tour de France champion, agreed that the Yellowstone Club, a millionaires-only private ski and golf community in Big Sky, will pay LeMond and other plaintiffs in the case the final $20 million to settle the property dispute upon the sale of the 13,400-acre development.

The Wall Street Journal reported last month that the Boston-based company Crossharbor Capital is working on a deal to buy the property for between $400 million and $600 million. A formal agreement on the sale has not been announced.

LeMond’s lawyers said an April 15 deadline agreed to for the final portion of the settlement is none too soon to complete the case.

“Plaintiffs simply want to get paid, and that’s our bottom line,” Chris Madel, a Minneapolis lawyer representing LeMond and other plaintiffs in the case, told Judge Loren Tucker in the Fifth District Court, which was heard in Dillon. “We intend to go forward, keep our foot on the gas until we see the money.” Madel added that throughout the lengthy case, they have had to pressure Yellowstone Club developer Tim Blixseth in order to keep the process moving forward.

“Until Mr. Blixseth’s back is against the wall, we don’t see movement,” Madel said.

The fight has been ongoing since May 2006, when LeMond, his wife, Kathy, her parents, David and Sacia Morris, and their friend, Jorge Jasson, sued Blixseth, his company Blixseth Inc., the Yellowstone Mountain Club LLC and Yellowstone Development LLC. The plaintiffs alleged they had invested $3 million as “pioneer” shareholders in the club, which members have to show $3 million in net worth to join, only to have Blixseth use the money to fund other business ventures at the expense of the original shareholders.

When Blixseth allegedly offered a buyout of $1.25 million to each of the plaintiffs, plus a lot in the club valued at $2 million to $3 million, LeMond and the others sued to try to regain more.

After well over a year of intense legal wrangling that has swamped the court with 4,000 pages of documentation, the parties last year reached a settlement.

Under the terms of the deal, Blixseth will pay Greg and Kathy LeMond, $9.5 million, Jorge Jasson, $9.5 million, and David and Sacia Morris, who bought two shares, $19 million, according to court records. Last fall Blixseth paid the first $4.5 million installment, with the second slated to be paid by Jan. 31.

But that payment wasn’t made.

The agreement on the lawsuit reached Thursday requires the final payment be made by April 15. In return, LeMond’s lawyers agreed not to file further briefs in the case.

Stephen Brown, a Missoula lawyer representing Blixseth and the club, said they wanted the time to hammer out the sale of the club.

“We think the time is better spent trying to get the sale completed, rather than writing briefs,” he said.

He later refused to comment on the settlement.

Blixseth and his business ventures have tried throughout the case to keep the court record sealed, which LeMond’s lawyers have fought. Brown maintained that position Thursday, arguing the agreement was reached through mediation and therefore in Montana should remain a closed file.

“It’s our position that it’s a confidential agreement,” he said. “The bargain is confidential in terms of what is paid and when it is paid.” Jim Goetz disputed that in court, contending the Montana Constitution guarantees it remain open to the public.

“This is an open court matter,” he said.

— Reporter Nick Gevock may be reached at nick.gevock@mtstandard.com