Billy Madison is the dimwitted, childish, and spoiled 27-year-old heir to Madison Hotels, a Fortune 500 chain of 650 hotels founded by his father, retiring tycoon Brian Madison. Billy spends his days drinking with friends and creating disturbances across his father's estate. One evening, Billy ruins a dinner meeting between his father and his associates by acting obnoxiously. Brian loses confidence in his son and chooses his devious executive vice president Eric Gordon to take over Madison Hotels. When Billy begs his father to reconsider his decision, as he knows how callous and cruel Eric is, Brian reveals that he secretly bribed Billy's school teachers to give him passing grades. The two finally compromise: Billy must complete all 12 grades in two-weeks to prove he is competent enough to manage the company.