IN RE YELLOWSTONE MOUNTAIN CLUB, LLC
460 B.R. 254 (2011)
In re YELLOWSTONE MOUNTAIN CLUB, LLC, Debtor.
In re Yellowstone Development, LLC, Debtor.
In re Yellowstone Club Construction Company, LLC, Debtor.
In re Big Sky Ridge, LLC, Debtor.
Nos. 08-61570-11, 08-61571-11, 08-61573-11, 08-61572-11.
United States Bankruptcy Court, D. Montana.
September 30, 2011.
Connie Sue Martin, Bullivant Houser Bailey PC, Seattle, WA, Craig D. Martinson, Billings, MT, David A. Ernst, Thomas L. Hutchinson, Bullivant Houser Bailey PC, Portland, OR, Gig A. Tollefsen, Berg Lilly & Tollefsen, Bozeman, MT, James A. Patten, Billings, MT, Lawrence R. Ream, Bullivant Houser Bailey PC, Seattle, WA, Richard G. Birinyi, Schwabe, Williamson & Wyatt, Seattle, WA, Stephen Deatherage, Troy Greenfield, Bullivant Houser Bailey PC, Seattle, WA, for Debtors.
MEMORANDUM of DECISION
RALPH B. KIRSCHER, Bankruptcy Judge.
The Court is tasked with writing yet another chapter in the Yellowstone Club bankruptcy saga, which has been ongoing for almost three years. If this were a book, the reader would most likely read the chapters of the saga in sequence and in a relatively compressed period of time. But this is not a novel and one cannot thumb through a prior chapter to glean a forgotten fact. Thus, the Court directs the reader to prior chapters (Memoranda of Decision and Orders) that provide some insight as to why another chapter is necessary. Relevant facts may be found in this Court's Memorandum of Decision and Order entered in this case at docket entry nos. 1025 and 1026. One may also look at the Memoranda of Decision, Order and Judgment found at docket entry nos. 292, 293, 575 and 582 in related Adversary Proceeding 09-00014, Timothy L. Blixseth v. Marc S. Kirschner, Trustee of the Yellowstone Club Liquidating Trust. Along these same lines, the Court also granted various requests for judicial notice found at docket entry nos. 2203, 2209, 2224 (including its attached Exhibit A summarizing the claims processed or prosecuted by the Liquidating Trustee under the plan), 2228 and 2240.
The matter presently before the Court stems from a Memorandum of Decision and Order entered by the Court in the above-referenced Chapter 11 bankruptcy cases on June 2, 2009, at docket entry nos. 1025 and 1026 approving the Yellowstone Club Settlement Term Sheet and confirming the Debtors' Third Amended Joint Plan of Reorganization filed May 29, 2009, at docket entry no. 995. Timothy L. Blixseth ("Blixseth") appealed this Court's June 2, 2009, Order to the United States District Court for the District of Montana on three separate grounds: (1) whether this Court erred in approving the Plan's exculpatory clauses and releases in favor of third parties in the Plan; (2) whether this Court erred in determining the Plan was proposed in good faith when the question
of the Debtors' bad faith remained as an unresolved factual issue in a pending adversary proceeding; and (3) whether this Court erred in approving the settlement incorporated into the Plan without a motion to approve the settlement, notice of motion, and hearing as required under F.R.B.P. 9019(a). In a Memorandum and Order entered November 2, 2010, United States District Judge Sam E. Haddon declined to rule on the issue of good faith, stating "determination of this issue on the present record is premature and unnecessary at this time." On the other two questions presented, Judge Haddon reversed and remanded. First, Judge Haddon held this Court erred when it proceeded to confirmation of the Debtors' Plan without appropriate notice and opportunity for all parties to object to a certain settlement that was incorporated into the Plan. Judge Haddon also reversed and remanded, so this Court could, "to the extent feasible. . . explicitly identify and delineate those persons or representatives determined to be within the scope of the release parameters of Section 524(e) and to state the reasons why it reached such conclusions."
In an Order entered May 27, 2011, this Court scheduled a hearing for July 11, 2011,
1. To consider whether Debtor's Third Amended Joint Plan of Reorganization filed May 29, 2009, at docket entry no. 995 was proposed in good faith,
2. To identify and delineate those persons or representatives who are properly within the scope, under 11 U.S.C. § 524(e), of the exculpation and limitation of liability clause set forth in Section 8.4 of Debtor's Third Amended Joint Plan of Reorganization, and