Remember when we told you about the guy who would rather flip a coin than split the difference?
He won that flip (and saved himself $3.75 million), but things haven’t been going so well since. The coin flip was about the fee on a $375 million loan for the development of the Yellowstone Mountain Club, which ended up being a disaster that only got worse when the developer, Tim Blixseth, and his wife started feuding. Who knew building an ultra (see details after the jump) posh resort as the economy cratered wouldn’t work out?
After the jump, some of the items for sale in an auction that blows away the Lehman sale.
Credit Suisse certainly didn’t see it coming. The bank had done more than $3 billion worth of resort deals when this one cratered in spectacular fashion. The Atlantic recounted the whole mess back in a May piece entitled, “Greed, Bankruptcy, and the Super Rich.” The NY Times piled on with a long piece about the “shenanigans.”
Credit Suisse came up with a plan that would have protected some of its investment, but the Montana bankruptcy judge as having none of it.
The trial was quite a spectacle. Under Kirscher’s firm hand, the bankruptcy process compressed into weeks complex litigation that would normally take years. Kirscher, feeling pressure to make a decision and clear the way for an auction of the club, issued a partial ruling that minced no words about Credit Suisse’s behavior, blasting the bank for acting out of “naked greed” and making a “predatory” loan with total disregard for the consequences. He stripped Credit Suisse of its first lien position, a rare act in bankruptcy court.
CrossHarbor Capital Partners ended up buying the assets in July and has put them on the block:
The items that were supposed to furnish “The Pinnacle,” the resort’s never-built home that would have gone on the market for $155 million, will be auctioned off at Red Baron Antiques in Atlanta Nov. 6 through Nov. 8. According to the Bozeman Daily Chronicle, the more-than 300 items may yield $8 million or more. The auction will feature such goodies as a cased knife display, a pair of“Flamboyant [sic] Gothic throne chairs” and a “tasting room” originally from a Scottish castle.
But who would buy such things, and why?
“People buy this kind of furniture when they want you to know they’re rich,” Red Baron President Bob Brown told the Chronicle. “You can’t put $100 bills on your wallpaper, so that’s what you do.”
Ahh, of course.
Not a whole lot of BigLaw on this one, but there’s some from the bankruptcy. Skadden’s Evan Levy, Robert Saunders, and Mark Chehi represented creditor Credit Suisse (which was on the losing end of that coin flip).