It appears bigger fish have moved into Whitefish, edging local financial firms off the Winter Sports Incorporated (WSI) board of directors, which sets overall policy for Big Mountain Resort, which WSI owns.
Six past board members, mostly Flathead Valley residents, have not been re-nominated for the board, including Charles Abell, who had served on the board since 1992, but told the Daily Inter Lake that he “didn’t make the cut” this year. Abell is currently president of the Whitefish Credit Union. Jerome Broussard, former president of Columbia Falls Aluminum Company, is also absent from the list of new nominees.
Of the nine nominees to the WSI board of directors this year, five are newcomers, and six work in upper-management for national financial companies, including Fidelity National Financial, a Jacksonville, Fla.-based firm listed at 261 on the Fortune 500; American Capitol Group, which develops and owns shopping centers in the U.S., including Kalispell’s Glacier West Mall; and Imperial Capital, an investment firm with offices in Beverly Hills, New York and Whitefish.
Most of the six nominees from the national financial sector, according to Big Mountain CEO Fred Jones, have ties to the Flathead Valley, including family, businesses and second homes.
The other three nominees are Flathead Valley locals, one of whom, Mike Muldown, is the son of Lloyd “Mully” Muldown, who helped found the resort.
Shareholders vote on the board nominees Tuesday night. Voting results were expected to be in Wednesday, after press time for the Independent, but, as there are nine positions on the board, and nine nominees, the results would appear to be all but foregone.
Asked by the Independent if the board apparent represents positive change for Big Mountain and WSI, Dennis L. Green, who’s served as board chairman since 1986, is on the committee that nominated the new board candidates, and is up for a board position again, said, “absolutely.”
In fact, he said, WSI has already reaped the benefits of having these new investors, who flushed the company with cash when they purchased a large amount of newly issued stock in May 2005. The money raised from this stock issue, which amounted to $12.5 million, was used to clear WSI’s debts and start an expansion of skier services at the Outpost lodge.
Green speculated as to why managers of successful investment companies would be interested in running a Montana ski resort.
“This is a chance for them to be involved in something good, not only for themselves, but for the valley as a whole,” he said.
The imminent sea change on the board of directors comes after two years of major structural changes at WSI. In May 2004, the company eliminated more than half its shareholders using a “reverse split” to buy back many of its shares. The reverse split reduced every 150 shares to just one. Anyone who held less than 150 shares was bought out. This, according to Jones, allowed the company to reduce the number of shareholders from around 500 to below 200, reducing the company’s reporting requirements with the FCC, which, he said, in the post-Enron era of regulation, saved the company time and money.
The split also had the effect of reducing the number of people who could vote for board nominees and thus help set the direction for the future of Big Mountain.
The first of the national financiers swam into Whitefish in November 2004, when Dick Dasen Sr., formerly the largest shareholder in Big Mountain Ski Resort, sold his shares after being charged with prostitution and other sex crimes. Dasen has since been convicted of several sex offenses.
William P. Foley II, CEO of Fidelity National Financial, bought Dasen’s shares, making him the largest shareholder in the company, with 27 percent of its stock. Foley was then appointed to the board of directors. Over the next few months, Foley was able to purchase additional shares as they came on the market, according to Jones, and increase his ownership stake to 44 percent.
In May 2005, the board of directors voted to raise more capital by releasing 4,200 additional shares in the company, which brought in the $12.5 million. At that time, Foley bought more shares in Big Mountain, maintaining his position with 44 percent of WSI’s stock.
Jim Taylor, founder and chairman of American Capital Group, was also able to buy additional stock in this offering. Taylor is now a nominee for the board of directors, along with two men who work with Foley at Fidelity. Foley himself was not on the nominating committee, which consisted of five current board members, but according to Green, the committee votes for people that are likely to get elected.
“That would be the natural thing to do,” he said.
Since 1975, Green has served as president and general manager of Budget Finance, a company owned by Dasen.
With 44 percent of the shares, and therefore the vote, Foley would wield strong influence over who gets nominated. This changing of the guard appears to represent a shift from local financial backing to national, Dick Dasen to William Foley.
Foley was not available for comment.
“I think it’s going to be great,” said Beckie Krueger, who has owned the Big Drift coffee shop on Big Mountain for the last decade. “It’s going to be exciting for all the businesses. I think it’s going to bring more people to the area and up to the mountain.”
She attributed much of her positive attitude to Foley, whose record, she says, speaks for itself. Indeed, the company he manages was named one of the “26 Best-Managed Companies in the U.S.” by Forbes magazine. Krueger hopes these management skills will benefit Big Mountain.
Despite the generally glowing reviews of changes to the board, Green, the only board member who was available and willing to speak to the Independent, said he wouldn’t be surprised if locals got nervous about the changes.
“When you have change, people try to cast it in a negative light. It’s almost a natural thing,” he said. “I think it’d be better to wait and see. These are not bad people, they’re successful people.”