Read this, this was the article I was talking about.
Business mogul William P. Foley II is Big Mountain’s new majority shareholder. What’s his plan for the future?
Photo courtesy Brian Schott
the improvements Foley has made at Big Mountain include $5.2 million
for two new chair lifts. “These are gigantic investments,” says Foley.
“We’re not going to get any return on this, other than making this a
more attractive place to ski.”
It’s a busy Saturday on Big Mountain. A crowd of people stand at the
bottom of Chair 1 having spent the last 10 minutes shuffling through
one of four lines taking them to the liftees, employees who check lift
tickets with hand-held scanners before funneling the crowd into another
line leading to the lift.
As the liftees work to keep things moving, Fred Jones, CEO of Winter
Sports Inc. (WSI), which operates the ski resort, ducks under the ropes
cordoning off the lift lines, followed by a white-haired man in
sunglasses and a blue and orange Big Mountain jacket. The two men
approach a 20-something liftee named Sara.
“This is Bill,” says Jones, gesturing to his partner next to him, “and he’s going to be a trainee today.”
Bill isn’t a prospective employee, but nothing else is explained, so
Sara hands him her scanner and begins teaching him the basics of the
Bill’s full name is William P. Foley II. This year, he became the
majority shareholder in WSI, controlling 60 percent of the company’s
stock. Foley is also the founder, chairman and CEO of Jacksonville,
Fla.-based Fidelity National Financial Inc., a Fortune 500 company
encompassing the largest title insurance company in the world, among
several other large businesses. Last year, Fidelity earned $12.87
billion in revenue.
Foley’s ownership of WSI is just one of his Montana investments. In
2004, he purchased an 80,000-acre piece of property near Deer Lodge
through which runs both Rock Creek and Willow Creek. He says he’ll
personally screen applicants for a proposed development on the land
known as the Rock Creek Cattle Co. This month he also formed Glacier
Restaurant Group LLC, which includes two Whitefish restaurants he
already owned—The Craggy Range and The Corner House Grille—as well as
popular Whitefish restaurant Mambo Italiano and Montana-based
restaurant chain MacKenzie River Pizza Co. Doug McNicoll, owner of
Mambo, and Steve Shuel, owner of MacKenzie, will retain minority stakes
in the company, but Foley is the majority owner of the new company’s
shares. The plan, he says, is to turn these restaurants into chains in
middle-tier resort towns, like Bend, Ore., and Coeur d’Alene and Sand
Photo by Nelson Roosendahl
February, Foley spent a few hours scanning lift tickets at Big
Mountain’s Chair 1. The CEO is well-known for doing work at the most
basic levels of his companies so he can have direct interaction with
But of all Foley’s Montana investments, Big Mountain is probably the
most important, especially to residents of Whitefish. For one, it
represents an important piece of the valley’s economy. WSI employs 550
workers at peak season (full disclosure: my wife is one of them), and
earned approximately $13 million in revenues last year.
It also represents community pride. Whitefish residents got WSI off the
ground in 1947 by purchasing shares in the company to keep it afloat.
Many of those shares remained in the hands of locals, including the
children and grandchildren of the original shareholders, until December
2006, when a reverse stock split forced nearly all of them out and
handed control of the company to Foley.
The switch in power has locals openly concerned for Big Mountain’s
future. Former shareholders, along with residents who use the mountain,
worry Foley intends to turn the resort into another Aspen, Colo.—a
world-famous ski town, which has become so popular it’s unintentionally
priced out many locals, becoming an example of what many resort towns
want to avoid. Others wonder if Foley’s aiming to make Big Mountain
another Yellowstone Club, a private membership community near Big Sky
with a $250,000 registration fee in addition to a requirement of buying
or building a multi-million dollar home in a Club subdivision.
Perhaps the greatest fear, however, is that Foley has gotten into WSI only as a way to sell its valuable land assets.
Foley and his intentions are now the subject of mystery and rumor to
residents of Whitefish, partly because of his business reputation and
the fact that few know much about him or his vision of the resort’s
future. And yet here he is scanning lift tickets on a Saturday morning,
at least acting the part as a man of the people.
“I thought it’d be fun,” he says.
Photo by Paul Peters
since becoming an investor in WSI, has helped invest millions of
dollars into the resort’s infrastructure, part of which helped to
construct this new, $11.5 million day lodge.
Making a mogul
A few days earlier Foley is working from his office just north of
downtown Whitefish. It’s an upscale building featuring exposed lumber
and rock. Inside, Foley and his employees are dressed casually—Foley
eschews corporate dress codes—and everyone refers to the boss as “Bill.”
This particular location—one of three around the country Foley
regularly works from—is home to Fidelity National Timber Resources, a
subsidiary of Fidelity National Financial Inc. In May 2006, in one of
the company’s more prominent and controversial moves, Fidelity
purchased 70 percent of Cascade Timberlands LLC, which owns 300,000
acres of timberland in Oregon. Those shares are now in the possession
of Fidelity National Timber Resources. What happened with Cascade is
illustrative of what some think may happen with Big Mountain.
According to Foley, the massive chunk of Oregon land is in the process
of being rezoned as “resort overlay,” which allows for condos and golf
courses to replace the former timberlands. He says the Oregon land was
undervalued at just $400 per acre.
“I like to find something that’s sort of down and out, where you can
see the potential, put a little into it, and turn it around,” Foley
This seems to be his talent.
Foley, 67, was born in Austin, Texas, but grew up in Amarillo. He says that from a young age, he was interested in business.
“I was always trying to sell something—comic books, lemonade, newspapers…” he says. “I think it’s a little bit in the genes.”
His mother, he notes, started and sold four businesses in her lifetime. “That was something she gave to me,” he says.
Foley graduated from the United States Military Academy at West Point.
It wasn’t his first choice—his father pushed him to apply—and, at the
time, he didn’t like the rigor or discipline of the training. But he
credits the Academy with shaping who he is today.
“It taught me how to make decisions,” he says, “and not make excuses—to do the job.”
After three years at West Point, Foley went on to receive his MBA from
Seattle University in 1970, and in 1974 graduated from the University
of Washington School of Law. He went on to help establish a law firm in
1976, where he specialized in real estate law.
In 1984, he spied the opportunity that would make him the mogul he is
today: a small, then-Phoenix-based business named Fidelity National
Title Insurance Company.
“I could see I had a talent for putting deals together,” he says, and
he recognized Fidelity as a better chance to put his business skills to
use. Foley organized a buyout of Fidelity and became its CEO in 1984
and immediately began working out some of the kinks in the business. He
eliminated upper-management jobs in a company he viewed as “top heavy”
and improved the company’s relationship with its customers.
In fact, even today he still likes to do work at the most basic levels,
including direct interaction with customers. It’s part of the reason he
spent a Saturday scanning lift tickets at Big Mountain and, he says,
“the only way to really know what’s going on.”
Under Foley’s leadership, Fidelity also began snapping up small title
companies around the country. By 2000, it was the fourth-largest title
insurance company in the United States. Later that year Foley
engineered the acquisition of Chicago Title, the second-largest title
insurance company in the country. Fidelity then became number one.
It was also in 2000 when Foley first heard of Whitefish while on the phone with a business partner, Burt Sugarman.
“I was complaining about Aspen,” Foley says. He’d owned a home in Aspen
for a few years, and was vacationing there when he confessed to
Sugarman that he didn’t like it anymore. Foley says he’d gotten sick of
“You need to come to Whitefish,” Sugarman advised him.
“What’s Whitefish?” Foley asked. “That doesn’t sound inviting.”
Sugarman told him about the local golf courses, the lake and proximity
to Glacier National Park. Foley chartered a plane and flew up the next
Upon seeing Whitefish, he took in the sights and remembers thinking,
“This is unbelievable. You’ve got a lake, a golf course, a ski resort,
it’s low key… You’ve got to be kidding me.”
Photo by Paul Peters
Schenck, whose father helped found the corporation that operates Big
Mountain, was bought out in a recent reverse stock split that gave
Foley a majority stake in the company. Schenck thinks more could have
been done to retain local shareholders.
He and Sugarman went on a tour of lakefront homes for sale and Foley
found one he liked, making an offer that day. He owned the house 30
days later. Meanwhile, as the deal for his first Whitefish home was
going through, he sold his Aspen property and bought another nine acres
at the north end of the Whitefish Lake. A few years later, he also
purchased Sugarman’s 130-acre estate, also just north of Whitefish
Lake. Sugarman, Foley says, moved to the Yellowstone Club.
Foley now spends part of his year in Whitefish. He works mostly out of
Jacksonville, Fla., where Fidelity is based, and also travels to Santa
Barbara, Calif., where he owns two wineries.
He calls these three locations his “triangle,” and now that he’s more
involved with businesses in Whitefish he plans to alter the balance
between its three points so that most of his time is spent in Western
From ski town to company town
Ed Schenck and George Prentice founded WSI in 1947. Early on, the two
men ran out of money trying to start the resort, forcing them to turn
to the citizens of Whitefish to help save their dream by investing in
Whitefish responded, purchasing enough stock to get Big Mountain off
the ground. A Saturday Evening Post story from 1950 quotes Schenck
how he and Prentice would respond to people who asked how they managed
to start the resort: “‘It’s easy,’ we tell them… ‘All you have to do is
find a town like Whitefish.’”
In the 1980s, Budget Finance, a Kalispell company run by Richard A.
Dasen, began buying up WSI shares, eventually owning about a quarter of
the corporation. But Dasen infamously ran into problems in February
2004, when he was arrested and eventually jailed for
In November 2004, as legal and financial problems mounted for Dasen, he sold Budget’s shares in WSI to Foley.
Several months before Foley bought Dasen’s shares, WSI had done a 1-150
reverse stock split, meaning a shareholder with 150 shares before the
split would have 1 after, a shareholder with 1,500 would have 10, etc.
WSI bought out anyone with fewer than 150 shares. This reduced the
number of shareholders from 500 to 200, allowing WSI to save money on
reporting costs with the Federal Trade Commission.
In May 2005, the company offered $12.5 million in new stock to current
shareholders. A few of the most invested shareholders, including Foley,
purchased it to help raise money for debt-ridden WSI. With that, Foley
raised his stake in the company to 44 percent.
In November 2006, the WSI board, largely controlled by Foley because of
his preponderance of shares, approved another reverse split, this time
The purpose of this split, Foley says, was to allow WSI to become an
“S” corporation, which cannot have more than 100 shareholders. As an S
corporation, all profits and losses accrued by WSI are passed on to the
shareholders, who are also responsible for the federal taxes that would
have gone to the business. Foley says WSI is almost guaranteed to lose
money over the next five years, and by creating an S corporation it
helps shareholders at least write off the losses on their personal
The split reduced the number of shareholders to just 37, with Foley owning 60 percent of the company.
A benevolent dictator
Karl Schenck is the son of WSI co-founder Ed Schenck, and owned 14
shares before the most recent stock split—one less than he needed to
stay with the company. Being forced out of the company, he says, “Made
me mad. I practically grew up [on Big Mountain]. It’s like my brother
or something, and it’s like they cut it out of my life.”
The Independent spoke with four former WSI shareholders for this story,
but only Ed Schenck agreed to go on the record. The rest asked to speak
off the record for fear of compromising their ongoing involvement with
Big Mountain in capacities beyond owning stock.
Photo by Paul Peters
Jones, CEO of Winter Sports Inc. holds up a drawing of what the
mountain’s new hotel/condo complex will look like. Ground for the new
building will be broken in 2008
Schenck biggest problem with the WSI board is it did not give notice to
shareholders of the most recent split. With some notice, Schenck says,
he could have bought one share from his brother or mother and
maintained a stake in the company. “They could have given us a chance,”
But WSI CEO Fred Jones says when the 2004 stock split took place, one
shareholder used the information to distribute his stock in a way that
cost WSI an extra $1 million to buy him out.
Still, Schenck says, “I’m sure there was lots of ways they could have kept us in.”
One way was for WSI to delay filing paperwork for the split at the
request of local shareholders who hoped to consolidate their shares
under the name of a single business. That move, Schenck says, would
still allow WSI to become an S corporation. WSI agreed to the delay.
Schenck and other former shareholders say a consultant helped them find
a way to create a single shareholding entity for locals, but according
to Jones, the proposal “wasn’t going to work.” On January 5, the WSI
board decided to go ahead and file the paperwork.
Ultimately, Schenck says, “I think it was probably a good business
decision for the people that own all the stock,” but adds he doesn’t
think it was in Whitefish’s best interests.
However Schenck and others feel about Foley’s stock purchase, nearly
everyone involved with the resort admits it certainly needed Foley’s
infusion of cash.
Jones says before Foley got involved, WSI was heavily in debt, losing
money every year and using cash from real estate sales just to stay
afloat. As a result, no money was being spent to upgrade the mountain’s
infrastructure, making the mountain less attractive to skiers.
“We were losing ground,” Jones says.
Foley says that when he invested in the mountain, “I didn’t really look
at the financials.” He then uses the same line from when he was
scanning tickets: “I just thought it’d be fun.”
It wasn’t until after Foley bought his shares that he learned of WSI’s problems.
“The infrastructure was falling apart, there was no money to buy new
groomers,” he says. “It was completely dysfunctional. Literally, almost
every chair lift was falling apart.”
The problem, Foley surmises, is that Big Mountain, “was run by committee,” before he came in.
“Democracy isn’t always the best thing for a corporation,” he says. “Sometimes you’re better off with a benevolent dictator.”
A little cash doesn’t hurt either. Foley, Jones says, made the largest
investment in WSI’s private sale of shares in May 2005. And by the end
of March, when the final installment from the stock sales is received,
about $25 million will have been raised for the mountain.
Some of that money has already gone toward a new day lodge. In the
past, services on the mountain such as lift ticket sales, rentals, the
ski school and its base area cafeteria were divided between several
buildings, all separated by steep roads and ski runs. At a cost of
$11.5 million, the new day lodge combines all these services in one
The biggest boon to skiers and snowboarders are two new chair lifts to
be built this summer at a cost of $5.2 million. The lifts will replace
Chair 2, a smaller chair with access to beginner and intermediate
terrain, and Chair 1, Big Mountain’s chief lift.
In the coming years, there are also plans to build more lodging.
“It’s going to be terrific. These are gigantic investments,” Foley
says. “We’re not going to get any return on this, other than making
this a more attractive place to ski. I don’t know if I’ll make any
money on the investment. I really doubt it.”
But former shareholders doubt Foley’s “just for fun” refrain, noting the value of 800 undeveloped acres on Big Mountain.
“People like that don’t just invest in things for fun,” one former shareholder says.
“In the long run,” Schenck says, in reference to the undeveloped land, “I think they’re going to sell the property.”
Schenck’s logic is thus: Foley acquires a majority of WSI’s shares,
sets up the corporation so that profits accrue directly to the
shareholders, and then limits the number of shareholders so there are
less people to share the money with when the corporation’s most
valuable asset, its land, is sold off.
Photo courtesy Brian Schott
the concerns of former shareholders and Whitefish residents is that
Foley will sell off 800 undeveloped acres on Big Mountain, or turn the
resort into another Aspen, Colo., or Yellowstone Club. Foley denies any
Foley acknowledges that the 800 acres was part of the reason he saw WSI
as a good investment, but denies that he’s planning to plunder the
“We only had one reason to do the reverse split,” he says, “to reduce
the number of shareholders so that we could have a subchapter S
Schenck and other former shareholders also say people come to them
constantly with fears Big Mountain will be turned into the next Aspen
or Yellowstone Club.
One shareholder, who works closely with the local tourism industry,
noted a recent National Geographic-sponsored survey stating most U.S.
tourists are interested in “geotourism,” which National Geographic
defines as, “Tourism that sustains or enhances the geographical
character of a place—its environment, heritage, aesthetics, culture,
and the well-being of its residents.”
In that shareholder’s estimation, this means, “People are interested in
traveling to real places. People don’t want fake. Fake is everywhere;
authentic is hard to find.”
Fake, to this shareholder, equals Aspen and the Yellowstone Club;
authentic equals Whitefish, with its working class residents and
throwback traditions, like the penguins and yetis who populate its
annual winter carnival.
“We’re on the cutting edge of what people want now,” the shareholder
says. Changing over to a more Aspen-style resort, she believes, would
have negative consequences. “That is just repugnant to people here.”
Foley responds to these fears saying: “I left Aspen. I couldn’t stand
it. I wouldn’t let it happen here. That mountain is always going to be
local and low key.”
And he responds to the idea that he might try to create a private resort like Yellowstone Club with a laugh.
“No chance,” he says. “That is glitzy.”
Ultimately, he says he wants Big Mountain to “try to do the big things
well,” and get rid of the small things that people don’t use much. For
instance, Foley questions a few aspects of the mountain’s operations,
such as night skiing, the superpipe and the Thanksgiving Day opening.
He wonders whether enough people really use night skiing to justify it,
whether all the time and resources needed to annually build the
superpipe (which couldn’t be opened until mid-February this year) are
worth it, and whether Thanksgiving Day is too early.
Foley hasn’t made any decisions about these services yet, but he has
turned an eye to the mountain’s operations, searching for
Where the proof is
Foley says he’s here for the long haul. Explaining his attraction to
Montana, he says, “People my age remember the way it was in the 1950s.
As a kid you could go anywhere you wanted to go. You felt safe, you
felt secure; it was a very simple life. Montana differs from nearly
every other state because it’s still a simple life here.”
He appears to embrace the simple life while working as a liftee.
Not long after Sara has begun working with her “trainee,” she goes off
to find a new battery for their handheld scanner, leaving Foley to
manage the line himself.
Foley allows the first group of people to go out of turn, and they cut
off another group. He tries to stop the first group and make them come
back, but that only causes more confusion. Another liftee finally comes
over and straightens the mess out, leaving Foley to only shake his head.
“My first responsibility and I screw it up,” he jokes.
Within a few minutes, he’s got things running more smoothly, chatting
with the skiers and snowboarders and joking with the liftees, who have
used his extra help as a chance to take breaks.
“Are you guys taking advantage of me?” he asks Sara, laughing.
If Foley is the proverbial wolf in sheep’s clothing, he’s good at
faking it. He appears natural during this Saturday morning stunt,
comfortable interacting with those who will be most affected by any
changes at the resort. In fact, even his biggest critics are optimistic
that he’s here to build a better community.
Says Schenck, “I have all the hope in the world that that’s what he wants to do.”