Developer Tim Blixseth Asks Judge to Punish Montana Tax Officials For Illegally Trying to Force Him Into Bankruptcy

Jun 02, 2011, 10:51 ET from Tim Blixseth

Will Donate All Punitive Damages To Legal Aid Groups

LAS VEGAS, June 2, 2011 /PRNewswire-USNewswire/ -- Developer and Yellowstone Club founder Tim Blixseth is asking a federal bankruptcy judge to punish the state of Montana for its illegal attempt to force him into involuntary bankruptcy. In a new motion, Mr. Blixseth is asking U.S. Bankruptcy Judge Bruce A. Markell to assess punitive damages against the Montana Department of Revenue "for its malfeasance and to deter future litigants from repeating its mistakes."

Mr. Blixseth is pledging to donate any award of punitive damages to legal organizations that assist the needy, such as the Legal Aid Center of Southern Nevada.

"I grew up on welfare in Roseburg, Oregon, and remember how impossible it was for my parents to afford legal aid when they and our neighbors were the victims of a financial scam," Mr. Blixseth said. "I have never forgotten how my mom stood up for all of us, even though she had no money. All she had was justice on her side.  In her honor, I am pledging to donate any and all punitive damages awarded in my case to legal aid organizations in Nevada. Hopefully those funds will help defend people like my family when I was growing up."

Mr. Blixseth filed motions for damages and to recover all legal fees incurred in the case, just two weeks after Judge Markell rejected the state of Montana's attempts to force Mr. Blixseth into involuntary bankruptcy. Judge Markell ruled on May 18 that the Montana Department of Revenue had erred in bringing the action in the state of Nevada, where Mr. Blixseth does not live or work. The judge set an early September trial date on Mr. Blixseth's motion for sanctions and damages against the Montana Department of Revenue and related parties.

Today's motion states: "Mr. Blixseth will ask the Court to donate any award of punitive damages, or will himself donate any punitive damages he is awarded, to an organization providing legal defense for indigent persons."

"The Montana Department of Revenue tried to use a forced bankruptcy to gain a litigation advantage over me. It was a crude bullying attempt, and nothing more," Mr. Blixseth said. "Now, hopefully something good will come out of their conduct and we will be able to donate some much-needed funds to legal aid organizations in Nevada."

The case is 11-15010-bam, filed in US Bankruptcy Court in the District of Nevada.

SOURCE Tim Blixseth