Word: rko
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With another swish of the revolving door, RKO last week lost its two remaining top officers and was left with a board of directors of only two members. Just three weeks ago, Chairman Arnold Grant forced the resignations of President Ralph Stolkin and one director who had been in & out of trouble for their punchboard and other activities (TIME, Oct. 27) before they bought control of RKO from Howard Hughes. Last week Chairman Grant, who had been hired at $2,000 a week by the new owners to run the company, turned in his resignation. Out with him went...
...latest blowup followed a directors' meeting which Grant had called to fill RKO board vacancies. Grant had two nominees, who he thought would restore some confidence in the company: Lionel Corp.'s President Lawrence Cowen and Robert Butler, a St. Paul construction engineer and former U.S. Ambassador to Australia and Cuba. But when Grant named his men, Directors Sherrill Corwin and Edward Burke Jr., both members of the Stolkin group, turned thumbs down. When they failed to name any substitutes of their own, Grant resigned. Said he: "My hands are manacled...
...only the beginning of a busy day for RKO. In New York three small stockholders filed suit demanding that a temporary receiver be appointed for the company "to prevent it from becoming insolvent." Almost simultaneously, they filed another suit against Howard Hughes, asking an accounting of "his stewardship [and] all damages caused by his mismanagement, neglect and reckless disregard of his duties" when he was boss of the big moviemaker...
...frequently tangled with the Federal Trade Commission and Better Business Bureau because of their punchboard promotions, mail-order life insurance and other past activities (TIME, Oct. 27). ¶Director William Gorman, the board representative of Oilman Ray Ryan, another member of the Stolkin-Koolish syndicate which bought control of RKO a month ago. Ryan's name had cropped up in the Kefauver hearings when it developed that he and Racketeer Frank Costello had an interest in the same oil lease. ¶Sidney Korshak, a Chicago lawyer who had helped out in the syndicate's negotiations with Howard Hughes...
Though Stolkin. Koolish and Ryan keep their big stock interests in RKO, Board Chairman Arnold Grant, who insisted on the resignations, said that henceforward they would be considered "no more, no less than ordinary stockholders." Grant hopes to fill the empty posts quickly "with men of outstanding caliber." They will have to be outstanding to pull RKO out of its present troubles. The company, said Grant, is losing money at the rate of $100,000 a week; he expects to get it into the black in two years...