By Joseph T. O’Connor Explorebigsky.com Editor

BIG SKY – Cross Harbor Group, majority owner of the Yellowstone Club, has made a strong move toward acquiring The Club at Spanish Peaks; however, the trustee in charge of the club’s estates has named another entity as the stalking horse bidder.

On April 19, the Boston-based investment company CHG bought the secured debt owed on the assets of Spanish Peaks, which remains in Chapter 7 bankruptcy. CHG purchased these claims, valued at $122 million, for an undisclosed amount from Spanish Peaks Acquisition Partners.

It then submitted a $20 million credit bid for Spanish Peaks to Ross Richardson, the trustee. As owner of the secured debt, CHG would recoup money bid on the Club by another entity in excess of CHG’s own $20 million bid, according to an email to the ad hoc group of Spanish Peaks homeowners from their steering committee. Essentially, CHG wins even if it loses: If it doesn’t obtain ownership of the club, it will receive cash from whichever entity does.

“It doesn’t hurt their position, does it?” said J. Thomas Beckett, attorney for the ad hoc group.

The move also allows CHG to counterbid if another group bids more than the $20 million. On April 26, Satterfield SP Acquisition, LLC, did just that.

In a 106-page docket filed April 26 in U.S. Bankruptcy Court for the District of Montana entitled, “Chapter 7 Trustee’s Notice of ‘Highest Offer’,” Richardson and Eastdil Secured named Satterfield the stalking horse bidder. The two-month-old organization submitted the highest bid, a cash offer of $22.05 million.

As the stalking horse, Satterfield will be recompensed for due diligence, or fees incurred while testing its investment prior to the auction. These include lawyer fees, research, architects’ plans and other expenses that will likely cost bidders between $200,000 and $300,000, according to the trustee’s lawyer, Stephan Garden.

The stalking horse also receives overbid protection, which requires any future bidder to put forth a bid equal to that of the stalking horse, plus 2.5 percent.

Stalking horse bids were due April 19. Richardson did not respond to phone calls from the Weekly requesting the number of stalking horse bids submitted.

An auction for The Club at Spanish Peaks’ assets will be held June 3 at the federal courthouse in Butte.

This is an ongoing story in the Weekly, which will feature subsequent installments as information becomes available.