MANAGEMENT: A Diversified Storm

From the directors of Investors Diversified Services, the nation's largest group of mutual funds (assets: $3 billion), came a terse announcement: a special meeting of stockholders was going to be convened to remove Clint W. Murchison Jr. and his brother John from the board. The reason for this action, explained the directors of the group, which is controlled by Alleghany Corp., was that the Murchisons refused "to cooperate with the company's finance and law committee."

The move against the Murchisons was another round in the fight for control of I.D.S. (TIME, Jan. 4), may well be the opening wallop in a new battle for control of Alleghany Corp. Both struggles grew out of the proxy fight of Alleghany Corp., then controlled by the late Robert R. Young and Allan Kirby, for control of the New York Central Railroad. An Alleghany financial adviser in the fight was Randolph Phillips, 49, who subsequently fell out with Young and Kirby and the Murchisons, who had helped Alleghany win the Central. Later, Alleghany sold the Murchisons its controlling stock in I.D.S., but Phillips won a court fight that forced them to sell it back to Alleghany, made his peace with Kirby, became an I.D.S. director and was elected chairman of the company's finance and law committee at $30,000 a year.

Phillips started investigating the Murchisons, demanded that they hand over a list of stock and brokerage houses with which they have had private dealings and with which I.D.S. might have done business. The Murchisons refused, quietly fought back. They added to their holdings in Alleghany Corp., giving rise to reports that they intended to try to throw out Kirby, then control both Alleghany and I.D.S. But since Kirby's Alleghany Corp. controls I.D.S., it looked as if the Murchisons would first be thrown off the I.D.S. board.

Last week the Murchisons went a step farther. In a New York federal court they filed suit against Kirby and Phillips, charging that they conspired to arrange the out-of-court settlement last year in return for Kirby's promising Phillips a job at I.D.S. The Murchisons asked the court to bar Phillips from serving as an I.D.S. director.

Were the Murchisons considering a proxy fight for control of Alleghany Corp.? Said John Murchison last week: "You don't just consider a proxy fight. Either you do it or you don't."