Serving on a court-appointed bankruptcy committee can come with many benefits, and the list just got a little longer. In Blixseth v. Brown, the Ninth Circuit held that committee members enjoy some of the same protections as trustees when it comes to potential attacks for actions taken during a bankruptcy case. Applying the Barton doctrine, the court held that a committee member could not be sued outside the bankruptcy court for actions taken in its committee member capacity without bankruptcy court approval.
In the late 1990s, Timothy Blixseth (“Blixseth”) and Edra Blixseth (“Edra”), then husband and wife, developed the Yellowstone Mountain Club (together with its subsidiaries and related entities, “Yellowstone”), an exclusive ski and golf resort in Montana that caters to the “ultra-wealthy.” Blixseth was advised by his lawyer, Stephen Brown (“Brown”), in his business activities and, later, in his divorce from Edra. As part of the divorce, Edra received the Yellowstone companies. Continue Reading