A bitter behind-the-scenes struggle at Greater Washington Investors Inc. exploded yesterday when two executives and six directors quit to publicize their deep differences with the Canadian industrialists who took over the venture capital company several years ago.
Leading the parade out the door of the Chevy Chase firm was Stephen W. Ritterbush, the president and chief executive officer, appointed to his job last January after the new owners ousted Don A. Christensen, who had held the president's job for 27 years.
Right behind Ritterbush was Richard P. Whitney, a senior vice president and director, who also joined the firm a year ago. Ritterbush and Whitney manage the separate Venture Fund of Washington, which invests in technology and service companies in the Washington region.
Sources close to the company said the officials, by resigning as a group, hoped to make a dramatic, if wordless statement on their unhappiness with the way the Canadian investors were treating Ritterbush, Whitney and the outside directors.
Their protests were directed at Greater Washington Chairman David L. Chandler and Rainer H. Bosselmann, who operate a string of industrial companies in the United States and Canada under the name Johnston Industries.
Johnston Industries owns about 35 percent of the stock of Greater Washington Investors, which once prospered by investing in high-growth companies but recently has fallen on hard times. Johnston Industries has seen the value of its Greater Washington shares decline by millions of dollars.
Chandler said the resignations were "the result of fundamental differences concerning the business direction of the company that had developed between the resigning directors and the remaining directors."
Company sources said that board members were particularly unhappy when Bosselmann moved into the Greater Washington headquarters and began to assume a management role, even though Ritterbush and Whitney were the company's officers.
At a meeting in November, sources said, the board voted 8 to 3 that Bosselmann leave the office, but apparently he did not.
Ritterbush and Whitney, supported by the board, apparently also angered Chandler and Bosselmann when the board voted to oust veteran staffer Martin S. Pinson, sources said.
According to the announcement, the directors who quit were John E. Gray, David T. Krausman, Hilliard W. Paige, Henry M. Ross, Charles Henry Smith Jr. and Edmund W.E. Stein.
Bonnie Wachtel, of the Wachtel & Co. brokerage that represents about 35,000 Greater Washington shares, said it was clear that trouble was brewing. "These are all strong-willed people," she said. The executives and board members had conflicting ideas about what they wanted to do. "Neither one was likely to give in to each other," Wachtel said.
The resignations came as the company's finances continued to founder because of stock market conditions, changes in growth industries and the internal strife at the company.
Greater Washington traditionally placed its investments in young, fast-growing, high-tech companies, which prospered during the 1970s and 1980s and brought high returns to their investors -- especially when the companies sold stock to the public.
The value of Greater Washington's investments was cut sharply by the 1987 market crash, by the shakeout in the computer industry and by a general downturn in technology stocks. That malaise has continued and grown worse during the fall of this year.
Greater Washington has seen its stock price continue to fall. Its shares closed yesterday at $2.37 1/2, unchanged, on the American Stock Exchange, well below their five-year high of $8.88. The resignations were announced after the market closed.
Chandler said he will serve as chief executive on an interim basis until a replacement is found for Ritterbush.
Chandler also said the company will seek new directors to fill the vacancies on the board and will submit the names at the annual shareholders meeting in April.
The resignations leave as board members only Chandler, Bosselmann and D. Irving Obrow, all associated with Johnston Industries.
One of the disputes between the original management and the Johnston Industries investors centered on the question of buying an operating company. Chandler and Bosselmann still want to use Greater Washington's resources to buy a company that would provide regular income to even out the ups and downs generally associated with venture capital firms.
While some of the managers and directors apparently were willing to consider the idea, there were some who felt that Greater Washington should stick to its original business -- helping fund the growth of young firms.