In addition to providing the University of Montana with a football stadium, it appears that Dennis Washington is playing hardball—with the group reorganizing Washington Group International (WGI) after the corporation bearing the Montana philanthropist’s name filed for bankruptcy in May.
Washington apparently threatened to leave the company if certain high-priced demands weren’t met. If approved by a federal bankruptcy court, the new deal will allow Washington (the person) to buy up to 40 percent of Washington (the reorganized company). Washington apparently threatened to leave the company and force a name change if more then 25 percent of certain WGI divisions are sold before the bankruptcy plan is approved.
Under the restructuring plan, if WGI sells more than 25 percent of any business unit except for its petro-chemical and mining divisions, Washington will automatically get a 15 percent kick back. It’s a steep price to pay to keep the company’s namesake, yet one the debtors of WGI were willing to pay, according to documents filed last week in federal bankruptcy court.
“The debtors believe that Mr. Washington’s continued involvement in managing the company’s businesses will be highly beneficial to these estates and the company’s future prospects,” the plan reads. The plan cites Washington’s “numerous significant contacts” in the industry as a key to the path out of financial ruin.
No word, however, on Washington’s role in putting WGI there in the first place, a story about which Washington remains silent, though he has been WGI’s chairman and CEO since the construction and engineering behemoth was created in July of 2000. A bad deal seems to be at the heart of WGI’s troubles, one to which Washington himself was very close. Apparently, the acquisition of construction giant Morrison Knudsen was not such a good idea, one that Washington, as a member of the board of that company since 1996, likely had some influence over. WGI is blaming the sellers of Morrison Knudsen, Raytheon Inc., for not being fiscally up front about the deal.
It’s a lot for any CEO to keep track of, particularly in Washington’s case. WGI has engineering and construction projects going with its 38,000 employees in most states and 43 countries around the world, including a recent deal for a coal mine in Washington State and a gas-fired electricity plant in Ecuador.
It’s difficult to speculate how much the bankruptcy affects the pocketbook of Montana’s only native billionaire. Like any good capitalist, Washington has kept his fortune diversified and separate from the incorporated business interests he watches over. No word yet on whether he’ll pace the sidelines of the stadium he financed if the Griz struggle on the gridiron this fall.