Frederick Koch, 86, who spurned family business, dies
In 1983, a wealthy American wandered into the Royal Shakespeare Company in Stratford-upon-Avon in England. He saw a scale model of a new theater that the company hoped to build, if only it had the money. The American said he would underwrite the project, but he wanted to remain anonymous.
Three years later, Queen Elizabeth II presided at the opening of the new Swan Theater. The American, Frederick R. Koch, who had built the theater for $2.8 million, stood by her side. But she respected his wish for privacy: She thanked “our generous benefactor” — but did not name him.
Koch (pronounced coke) kept a low profile for most of his life. When the news media mentioned him at all, it was usually in passing in reports about his three hard-charging billionaire younger brothers: Charles and David, who ran Koch Industries, the industrial behemoth founded by their father, and bankrolled libertarian causes; and William, David’s twin, an eclectic entrepreneur, collector and yachtsman who won the 1992 America’s Cup. (David died in August at 79.)
Frederick, who bore the aspect of an Edwardian gentleman, had little in common with his brothers. He devoted himself not to oil, the bedrock of Koch Industries, or to politics, but to the arts and historic preservation.
Koch died Wednesday at his home in Manhattan, where he had lived, as he preferred, in relative anonymity. He was 86. John Olsen, his friend and longtime assistant, said the cause was heart failure.
As an adult, Frederick, known as Freddie, rarely saw his brothers, except in court. In the 1980s and ’90s, the four were embroiled in what Fortune magazine called “perhaps the nastiest family feud in American business history,” with Charles and David, two of the richest people in the world, allied against William and Frederick.
While Frederick did not share the family’s corporate ethos, he did share, to a lesser degree, its immense wealth. This allowed him to pursue his own interests. A philanthropist and patron of the arts, he amassed extensive collections of literary and musical manuscripts, rare books, photographs and fine and decorative arts. His prized possessions included Marie Antoinette’s canopied bed.
He also collected manor houses in Europe and the United States. The crown jewel was a 150-room castle in Austria once owned by Archduke Franz Ferdinand, whose assassination in 1914 touched off World War I. The archduke used the castle, known as Blühnbach, as a hunting lodge; Koch used it for decades as his summer retreat. It provided easy access to the Salzburg Festival, which he attended every year.
Fred’s spurning of the family business helped fuel the disappointment that Fred Chase Koch, a selfmade man and rugged individualist, felt toward his oldest son.
“Father wanted to make all his boys into men, and Freddie couldn’t relate to that regime,” Charles Koch told the now-defunct Fame magazine in 1989.
William Koch, known as Bill, said in an interview for this obituary: “When Freddie was born, he was delicate, he liked the arts, he was a singer and loved poetry. He didn’t want to play baseball.”
And when their father sent the boys to ranches to toughen them up, he rebelled. “Instead of baling hay,” Bill said, “Freddie would hide in the hayloft.”
Bill Koch said that years later, their father discovered that $700 in traveler’s checks were missing and believed that Frederick, who was visiting his parents at the time, had stolen them. Frederick later told Bill that he had not. In any case, their father was furious and, after a lifetime of frustration with his namesake, considered this to have been the last straw.
“He threw Freddie out of the house and cut him out of his will,” Bill said. Through a trust, however, his father, who died in 1967, left Frederick 14% of the company’s stock.
That inevitably tied his fate to that of the conglomerate, which today, according to Forbes, is the second-largest privately held company in the country, with annual revenues of $110 billion. The Kochs are the nation’s third-richest family, worth $125 billion.
By 1980, the brothers, always competitive with one another, were engaged in open warfare over the fate of the company. Much of it was driven by Bill, who enlisted the support of Frederick and a half-dozen other shareholders who wanted to take the company public so that they could convert their stock to cash. Charles saw their moves as a takeover attempt, and the Board fired Bill, leading to a lawsuit and 18 years of legal skirmishing.
In 1983, Koch Industries — essentially Charles and David — settled with Bill, Frederick and the other dissident shareholders for $1.1 billion, with $470 million going to Bill and $330 million to Frederick.
But as Fame magazine put it, “all the money in the world hasn’t been enough to keep the family from falling apart.”