February 29th, 2016

Sanctioned Attorney Says Counterclaim Was ‘Mistake’

In an attempt to get out of paying sanctions ordered by U.S. District Judge Gary A. Feess, attorney Christopher Conant tried to say his decision to file a $9 billion counterclaim against a trustee of a bankrupt ski resort was an error.

The three-judge panel of the 9th U.S. Circuit Court of Appeals did not appear entirely convinced, according to a news report on Law360.com.

“Your explanation of why you did that just makes no sense to me,” said Judge Richard Paez, noting that Conant didn’t realize the mistake until it was pointed out by the trust.

The case involves the Yellowstone Mountain Club, whose founder, Tim Blixseth, is in jail on contempt charges for refusing to disclose what happened to the proceeds from the $13.8 million sale of a luxury property in Mexico. Blixseth has civil judgments of more than $250 million against him by the club’s creditors.

According to the Associated Press, the luxury resort went bankrupt in 2008 after Blixseth “pocketed much of a $375 million Credit Suisse loan to the resort and later gave up control of the enterprise to his ex-wife during their 2008 divorce.”

Mark S. Kirschner, the trustee who was sued, stepped down and was replaced by Brian Glasser, of Bailey & Glasser’s Charleston, West Virginia, office.

Kevin Barrett, also of Bailey & Glasser’s Charleston office, represented the trust during oral arguments before the panel. He urged the judges to affirm the sanctions. “The very act of filing this claim against Mr. Kirschner was an act of bad faith and a blatant disregard for the rules, but because they did not care, they wanted to intimidate Mr. Kirschner, they wanted to harass Mr. Kirschner by filing a $9 billion lawsuit against him, and frankly it worked, Mr. Kirschner resigned, and he was replaced, and that’s problematic,” Barrett said.

Videos of the arguments are available online.