Nov. 26, 2008 - --The millionaires-only Yellowstone Club private ski resort may be hundreds of millions in debt, but representatives for the bankrupt development argued in court Tuesday it should be allowed to borrow more to avoid a judge-ordered liquidation of the property.

If the chairlifts, restaurants and other amenities at the exclusive don't open this winter, the property could go for a fraction of its market value, Ronald Greenspan, a real estate consultant for the club, said in federal bankruptcy court in Butte.

"Sale of an operating project is going to get you substantially more value than a sale of a shutdown project with 240 really powerful, pissed off people," he said.

U.S. Bankruptcy Judge Ralph Kirscher delayed a decision on whether to allow CrossHarbor Capital Partners, a Boston real estate investment company, to put up $19 million in "priming" funding to keep the resort running through April. He weighed that proposal with another plan from Credit Suisse, the club's largest creditor that is owed $307 million from a loan last year. The club, located next to Big Sky, filed for bankruptcy Nov. 10 and received an interim $4.4 million loan from Credit Suisse to keep it running. As part of a divorce settlement between its founders Tim and Edra Blixseth, she took control of the club and is trying to get it financially solvent.

Edra Blixseth in court records claims the club has $399 million in debts and $599 million in assets. The creditors include more than 300 members who put up at least $250,000 to join the club, contractors, employees and numerous other businesses that provided services and supplies there.

But the interim funding will run out by Saturday. Credit Suisse and the club were working on a longer term deal that fell through just before Tuesday's hearing.

Kirscher gave all day for an agreement to be reached. When no deal could be hammered out, he listened as Sam Byrne, CrossHarbor principal, made his case for his proposal.

It called for his group to put up the $19 million, plus existing club members to pay double in winter fees. And it called for another company to manage the club.

Byrne in video testimony said his company has already invested $100 million and badly wants to see it succeed. He said that will take an infusion of cash and better management.

"We're just trying to fix the place," he said. "Anybody who's read the papers for the past three years knows it's been a tremendous circus out there." But Mark Chehi, a lawyer representing Credit Suisse, argued that CrossHarbor shouldn't be allowed to get in front of his clients by coming in with a short-term loan. He said that doesn't follow the legal standard that his company, with a primary lien on the property, has to be protected first.

Instead, Credit Suisse is offering funding to keep the club running until Dec. 5 so longer term arrangements can be worked out. And Chehi said CrossHarbor is too entwined with Edra Blixseth financially because she already has borrowed a lot of money from the company.

"They also control her in the extent that she owes them to the tune of $34 million," he said.

But Kirscher was critical of Credit Suisse's plan because it required the club to sell at least $5 million in golf course lots quickly as part of the funding package. He said that was unlikely given the current financial situation.

"Don't you impose a stranglehold on them -- 60 days to raise that on the sale of lots?" Kirscher said. "Would you say it's an effort to ensure that they do fail?" Kirscher said he'd make a ruling soon on which plan to go with.

Area businesses owed money Here are area businesses listed as creditors of the Yellowstone Club in federal court records:

--NorthWestern Energy, Butte, $92,603

--C D Enterprises, Inc., Butte, $29,711

--KR Office Interiors, Butte, $895

--Butte Chamber of Commerce, $200

--Restvedt Meats, Ennis, $620

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