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In re Yellowstone Mountain Club, LLC

United States District Court, D. Montana, Butte Division

January 10, 2017

In re YELLOWSTONE MOUNTAIN CLUB, LLC, et al, Debtors.
v.
DESERT RANCH LLLP, a Nevada limited liability limited partnership; DESERT RANCH MANAGEMENT LLC, a Nevada limited liability company; TIMOTHY BLIXSETH, an individual; BEAU BLIXSETH, an individual; THORNTON BYRON LLP, an Idaho limited liability partnership; GEORGE MACK, an individual; JOHN DOES 1-100; and XYZ CORPS. 1-100, Defendants. BRIAN A. GLASSER, AS TRUSTEE OF THE YELLOWSTONE CLUB LIQUIDATING TRUST, Plaintiff, Bankruptcy No. 08-61570-11 Adversary No. 10-00015 ORDER

          ORDER

          Sam E. Haddon, Judge

         This Adversary Proceeding was filed in the United States Bankruptcy Court for the District of Montana on February 19, 2010, and "referred to the United States District Court for District of Montana for trial by jury in accordance with Defendant George Mack's demand for jury trial, "[1] on July 29, 2015.

         On April 29, 2016, the Court received notice of filing of Chapter 7 proceedings in bankruptcy by Desert Ranch LLLP. On the same day, the Court issued its Order staying "[a]ll proceedings in this case . . . pending resolution of Desert Ranch LLLP's bankruptcy, 11 U.S.C. § 362."[2]

         On May 23, 2016, the Trust's claims against Defendant George Mack were dismissed with prejudice.[3]

         On May 27, 2016, Plaintiff Brian A. Glasser, as Trustee of the Yellowstone Club Liquidating Trust (the "Trust"), filed a Motion for Leave to File Motion for Order Directing Timothy L. Blixseth and Jessica F. Blixseth to Show Cause why They Should not be Held in Contempt of Court[4] and a Motion for an Order Severing and Directing Trial of Claims Against Thornton Byron LLP in Count II of the Complaint.[5]

         On June 9, 2016, the Court received notice of filing of Chapter 7 proceedings in bankruptcy by Desert Ranch Management LLC.[6]

         Proceedings in bankruptcy by Desert Ranch LLLP and Desert Ranch Management LLC remain pending.

         On June 13, 2016, the Trust filed Plaintiffs Motion for an Order Severing Claims Against Defendants Desert Ranch LLLP and Desert Ranch Management, LLC.[7]

         On October 20, 2016, the Trust obtained a $9.4 million jury verdict and judgment against Jessica Blixseth, now known as Jessica Elizabeth Ferguson, JTB, LLC, and the marital community of Jessica and Timothy Blixseth with respect to the transfers of Western Air & Water LLC and Kawish LLC to JTB, LLC and/or Jessica Blixseth.[8] That judgment has been settled and the Trust has agreed "to release Ms. Blixseth (and JTB and the marital estate) from all claims against her, including the claims the Trust sought to bring in connection with its motion for leave and the related motion for an order to show cause."[9]

         On December 20, 2016, the Trust moved "for entry of an order withdrawing its motion for leave to file a motion for an order directing Timothy L. Blixseth and Jessica E. Ferguson, formerly known as Jessica Blixseth, to show cause why they should not be held in contempt of court [Docs 90 & 91]."[10] Counsel for Jessica E. Ferguson, formerly known as Jessica Blixseth, and Thornton Byron LLP consented to the request.[11] The remaining Defendants, Desert Ranch, LLLP, Desert Ranch Management, LLC, Timothy Blixseth, and Beau Blixseth, did not respond to the Trust's L.R. 7.1 request.

         ORDERED:

1. This Court's stay order of April 29, 2016, is lifted for the sole purpose of granting the Trust's pending Motion for an Order Withdrawing Motion for Leave to File Motion for Order to Show Cause why Timothy L. Blixseth and Jessica E. Ferguson (Blixseth) Should not be Held in Contempt of Court.[12]
2. The Motion for Leave to File Motion for Order Directing Timothy L. Blixseth and Jessica F. Blixseth to Show Cause why They Should not be Held ...

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