SHOW BUSINESS: Blowup at RKO

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 his cousin, Executive Vice President Arnold Picker.

The 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.”

It was 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.

Looking anxiously around for a way out of their troubles, RKO’s owners were canvassing the field in search of someone willing to take the company off their hands. They got some encouragement. Matthew Fox, who made a fortune in movies before he got into such varied fields as toys (Bub-O-Loon) and international trade (TIME, July 19, 1948), was trying to make a deal. At week’s end, Atlas Corp.’s President Floyd Odium, who sold RKO to Howard Hughes in the first place, also got into the act. He said he was looking into RKO to see whether he might buy the company back again.

Meanwhile, RKO’s stock, which was at 4-⅝ only two months ago when the Stolkin group took control, was down to 3⅜. In Hollywood, at least, there was some activity on the RKO lot. Though the studio had no executive producer, it was starting production of Split Second, a melodrama, the first to get under way in seven months.