Small investors want to keep ties to resort

The Daily Inter Lake

A group of Winter Sports shareholders is researching a way to keep their small amounts of common stock despite a proposed reverse stock split that would shut out more than 100 small shareholders.

Winter Sports Inc., the parent company of Big Mountain Resort, will conduct a shareholders meeting at 9 a.m. today to vote on the stock split.

Because Winter Sports directors control roughly 61 percent of the outstanding common stock and intend to vote all their shares in favor of the reverse split, the reverse split is "virtually assured," a shareholder report said.

The proposed split prompted small shareholders such as Dale Duff of Whitefish to explore the idea of finding a way for shareholders with fewer than 15 shares to pool their stock and thus retain a corporate connection to the ski resort.

Shareholders met with Winter Sports President Fred Jones on Monday morning and spent much of the day researching options.

"Time is of the essence," Duff said. "We don't have a solution just yet, but we're continuing to explore the ways small shareholders may be able to combine their stock. Fred Jones has been most cooperative and open to our concerns."

Duff said the group hopes to work beyond today's meeting to develop a plan.

"We're hopeful to work beyond the deadline," he said. "There are some time lines we're examining. We're hopeful and optimistic that all avenues will be explored."

The latest stock split - a 1-for-15 reverse split of common stock with a cash payment for resulting fractional shares - will cash out between 100 and 110 current shareholders. Winter Sports will pay about $3.3 million for all resulting fractional shares at a pre-split value of $3,000 per share.

The restructuring reduces the total number of shareholders to roughly 40 to 50.

In May 2004, shareholders approved a 1-for-150 reverse stock split that freed Winter Sports from regulation by the Securities and Exchange Commission. Those owning 150 or more shares were issued new certificates for their post-split shares and a cash payment for any fractional shares.

There were roughly 900 shareholders before the 2004 stock split.

Last year's Winter Sports annual meeting was the first time in the resort's 59-year history that local nominees for the board of directors were outnumbered by out-of-state investors largely representing the financial sector. The shift from local to out-of-state ownership is troubling for many longtime shareholders who believe the community that essentially built the resort should retain some sense of ownership.

Duff said he and other organizers of the push to preserve the voice of small shareholders have a list of all shareholders but haven't been able to contact everyone.

"Some are unaware this dialog is continuing," he said. "We encourage all stockholders to show up so they have every opportunity to state their concerns."

Anyone interested in the consolidation effort can contact the Morrison and Frampton Law Office in Whitefish at 862-8829.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com