Round 2 for Allegheny?

Last May when Texans John and Clint Murchison Jr. (TIME cover, June 16) ousted Wall Street Millionaire Allan Kirby from control of Alleghany Corp., Kirby growled ominously: "The Murchison boys are way out on a limb." Last week Kirby. who still holds the biggest single block (33 1/3%) of Alleghany'sl common stock, reached for his saw. In a letter to the SEC, Kirby protested the Murchisons' proposal to split and reclassify the stock of Minneapolis' Investors Diversified Services, a $4 billion mutual fund complex currently controlled by Alleghany. Kirby clearly feared that if the Murchisons were allowed to convert all I.D.S. shares into voting stock as they proposed, their voting power in I.D.S. might exceed Alleghany's and allow them to retain control of the Minneapolis giant even if they should lose control of Alleghany.

Back at the ranch in Texas, the Murchisons were tight-lipped--but keeping their powder dry. Scarcely had Kirby made his move when the Murchisons sold off to Dallas Millionaire Troy Post for $17.5 million almost all their holdings in Florida's Gulf Life Insurance Co. Immediately, the financial world buzzed with talk that the Murchisons expected Kirby to launch a new proxy war for control of Alleghany and that the brothers planned to use the Gulf Life proceeds to pay off the debts they had incurred in the first Alleghany battle so that they could negotiate new loans if the need arose for them to buy more Alleghany stock.

Apparently anxious not to run afoul of the SEC, Kirby denied that he was planning a proxy war, said that he would be content simply to fight the Murchisons' I.D.S. scheme in the courts. But many Wall Streeters believed it was only a matter of time till the bell rang for Round 2 of the great Alleghany fight.

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