In 2011, Montana joined forces with the Idaho State Tax Commission and the California Franchise Tax Board against Blixseth. However, according to court documents, these two states had settled agreements and withdrew from the petition.
Nakagawa noted that it has been almost a decade since the hearing since the involuntary petition was filed. He said that since April 20, 2011, only Montana has continuously pursued this matter against Blixseth.
He said the Yellowstone Club’s Liquidating Trustee appeared to be interested in continuing the involuntary trial against Blixseth but resigned nearly two years before the 9th district mandate was received by that bankruptcy court.
“Montana claims to have ‘vigorously’ pursued this involuntary trial,” Nakagawa wrote. “There is no question that Montana has been more on the defensive than the offensive throughout the proceedings. Undoubtedly, the prospect of defending the alleged debtor’s likely claim under Section 303 (i) adds to the strength of Montana. “
He said Montana has provided no evidence that unsecured creditors eligible to participate in the lawsuit have “been prohibited from or even expressed an interest in it.”
“Under these circumstances, the discontinuation of these almost decades-long proceedings serves the public interest in a speedy processing of the bankruptcy proceedings,” wrote Nakagawa.