Tim Blixseth

Former billionaire Tim Blixseth and his creditors reached a $3 million settlement to satisfy longstanding claims that the real estate developer illegally pocketed hundreds of millions of dollars from a Montana resort for the super-rich. The agreement filed Friday calls for an Oregon real estate developer to pay $3 million on Blixseth's behalf to creditors for the Yellowstone Club. In exchange. Blixseth and his third wife, Edra, founded the exclusive resort near Big Sky in the late 1990s. Its private ski hill and golf course in the mountains near Yellowstone National Park attracted a celebrity-studded membership that reportedly includes former Vice President Dan Quayle, Microsoft co-founder Bill Gates and entertainer Justin Timberlake. The club spiraled into bankruptcy in 2008 following Tim and Edra Blixseth's divorce. The Montana club emerged from bankruptcy in 2009 under a new owner. The club's creditors, represented by the Yellowstone Club Liquidating Trust, suspected he had hidden assets. They spent years pursuing him in federal courts from Florida to California, and at one point put Blixseth's house under surveillance. But the years of investigation yielded only a small fraction of the $286 million they once sought, despite the string of monetary judgments against Blixseth in various federal courts. Blixseth, 67, who grew up in Oregon and used to reside Washington state is now believed to be living in Palm Desert, California. In return for funding the $3 million settlement revealed Friday, real estate developer Martin Kehoe inherits Blixseth's claims against parties that Blixseth says conspired against him. That includes an alleged $700 million in damages Blixseth is seeking against Montana officials in the forced bankruptcy case. The largest amount previously recovered by the club's creditors — $1.95 million — came in a lawsuit against Blixseth's fourth wife, Jessica, and his mother-in-law, to whom Blixseth had transferred a yacht, two jets and a mansion in an effort to shield them from his creditors, according to court documents. Tim and Jessica Blixseth are now divorced.