Friday, Mar. 22, 1963
Cohn's Costly Toy
When Roy Marcus Cohn at 32 bought control of Lionel Corp. in 1959, he was something like a little boy with a big toy. He switched the profitless model-train maker into everything from electronics to parachutes, brought in former Army Missile Chief John B. Medaris as president. Lionel turned into the black in 1960, but then some of Cohn's costly schemes began to sour. The company lost $2,500,000 in 1961, another $4,000,000 in 1962; Cohn shucked off several of the new subsidiaries and eased out General Medaris. Last week the word went out that Cohn was surrendering the controls at Lionel. First step: granting options for his 55,000 shares to a group headed by Manhattan Entrepreneur Victor Muscat.
Cohn stands to take a stock loss. The Lionel shares that he bought for $15 each closed last week at $6.50, which even at that represented a $1.25 rise for the week on news of Cohn's retreat. Cohn probably needs the money to finance another of his playthings. Championship Sports, Inc. Championship must have $200,000 to promote next month's heavyweight rematch between Sonny Liston and Floyd Patterson, but most of its proceeds from the first Liston-Patterson match were seized by the Internal Revenue Service. Helpfully ex-Champion Patterson has lent the outfit $125.000 to help finance his rematch.
No stranger to tight corners. Cohn has usually extricated himself with the footwork and quickness of tongue he learned as chief inquisitor for the late Senator Joseph McCarthy in the days when Cohn and Schine were names to reckon with. In recent years, bankrolled in part by high-interest moneylenders in Hong Kong and Panama, Cohn has restlessly bobbed in and out of control of five travel agencies, two airline-insurance companies, a savings and loan association, a small loan company and a swimming-pool building company. His associates in various deals have ranged from the late Columnist George Sokolsky to Lionel Executive Paul Hughes, who was named a co-conspirator but not a defendant in the $5,000,000 United Dye Swindle (TIME. March 15).
Though Cohn claims to have become a millionaire from all his ventures, he may well be squeezed for cash. He stands to collect a windfall soon from the Fifth Avenue Coach Lines, which the City of New York seized after Cohn and his friends gained control. A court fight over how much the city should pay to the dispossessed owners is due to be settled soon, very likely at a profit for Cohn. Cohn says that he owns 12,000 to 13,000 shares of Fifth Avenue Coach that he bought at an average of $15.50 each. Since then, the price of the stock has doubled.
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