Motion Picture News (Jan - Mar 1930)

44 Motion Picture News March 29, 1930 Sheehan Says Fox Harming Own Interests (Contmued from page 43) niittee with authority to act, to meet with Halsey, Stuart in an endeavor to negotiate a better plan. That motion was defeated, the vote being as follows : Mr. Rogers and I in favor (Mr. King was absent), and the other directors opposing. "On March 4, 1930, Halsey, Stuart & Co., Inc., served a copy of their revised plan on Mr. Samuel Untermyer, in the later afternoon, served Mr. Rogers and me, with a copy, also serving various other directors of the company with copies. "After studying the plan and comparing it with the Blair plan, Mr. Rogers and I came to the conclusion that said Halsey, Stuart plan of March 4th was in many respects superior to the Blair plan, because it indicated a saving to the company in the financing of a minimum of approximately $13,000,000, and a maximum of possibly $31,000,000, in addition to which, it allowed the company to function freely and to expand, aod did not freeze the credit or assets of the company. "Upon arriving at this conclusion, we invited several other executives of the company to participate in a discussion, as a result of which, they acquiescing in our view that the Halsey, Stuart plan was a superior one, more economical and in the best interests of the stockholders, employees and creditors of the company, we agreed to recommend the Halsey, Stuart plan, and subscribed a recommendation in the form hereto attached. Directors' Battle "On March 5, 1930, at 9:30 o'clock in the morning, at the offices of the company, 850 Tenth Ave., a meeting of the board of directors was held. At the opening of the meeting, Mr. Untermyer announced that this Halsey, Stuart plan had been served on him on the afternoon of March 4, and had been served on various directors the night before. He derided the plan and advised that it be given absolutely no consideration. Mr. Rogers arose and spoke in favor of the plan and pointed out its advantages. Mr. Untermyer brushed aside further argument or consideration of the Halsey, Stuart plan and called for an immediate vote, requesting Mr. Fox to take a vote. Mr. King refused to vote ; Mr. Rogers and •! voted in favor of adopting the Halsey, Stuart plan, and Mr. Fox and the other directors whom he has at all times controlled, voted against this plan. "Thereupon, I made a motion that the Halsey, Stuart plan be submitted to a special meeting of the stockholders which had been called for the same day, at 11 o'clock in the morning, for their consideration and action. Mr. Untermyer requested that I change the language of my resolution and simply refer the plan to the stockholders' meeting; which I declined to do. A vote was thereupon taken, Mr. Rogers, Mr. King and I voting in favor, and Mr. Fox and the other directors voting against it. "The attitude of Mr. Fox has been harmful to the best interests of the companies and to his own interests, as well. Without reasonable justification he has sought to repudiate a trust agreement under which these companies would he fully and completely financed. He has been obstructive to every suggestion that would be of benefit to the companies. He has refused to take counsel with the executives of these companies, many of whom have been associated with him since the inception of these enterprises. He has excluded himself from all participation in the active business affairs of the companies, and has assumed an attitude of in After All These Years Eddie Cantor has given the legit a big black double-cross. Read what he told a "N. Y. World" reporter: "In my opinion, the future of show business lies in the manufacture of talkies." 64 difference and disregard for the welfare of the business of these companies. "As a director of the Fox Film Corp., as general manager and as one who has contributed largely to the growth and expansion and the success of the company, I believe it my earnest obligation and duty to set forth the facts as they occurred and to explain to this court my reasons for favoring the adoption of the Halsey, Stuart plan and the carrying out of the trust agreement. I believe it is for the best interests of the company and all concerned that the trust agreement be carried out. "Halsey, Stuart & Co., Inc., at various times during the past few years, had financed the Fox Film Corp. and the Fox Theatres Corp. I have ascertained the exact amounts loaned, the time of repayment of each such loan, and the rate of interest paid. A tabulation of the same is as follows : Loan Made to Amount Date Made Date Paid Rate Fox Theatres 500.000 12/7/27 9/7/28 * Fox Film 1,000,000 1/23/28 3/15/2S 5% Fox F'ilm 10,000,000 2/26/29 4/2/29 6% Fox Theatres 250,000 3/28/29 6/12/29 6% Fox Theatres 1,000,000 4/29/29 6/12/29 6% Fo.\ Theatres 500,000 6/16/29 6/12/29 6% Fox Theatres 1,000,000 5/17/29 6/12/29 6% Fox Theatres 1,500,000 12/5/29 12/10/29 6% $15,750,000 * 5% till 6/6/28. 5^^% from 6/6/28 to 9/7/28. "These loans were unsecured. The interest charged on the loans was five per cent, five and one-half per cent and six per cent. On no loan did the interest rate exceed six per cent, the legal rate of interest in New York. Moreover, no bonus of any kind was paid to Halsey, Stuart & Co., Inc., by the Fox Film Corp. or the Fox Theatres Corp., in connection with these loans. "This information demonstrated to me the good faith, the good will and the fairness of business dealing with the Halsey, Stuart & Co. in its relations to the Fox interests. "I have not sought, nor do I seek, a receivership; and all the executives and employees of these tremendous enterprises are opposed to a receivership, which could only have a harmful and demoralizing effect. We want these enterprises to continue to flourish. We feel that the tremendous good will and prestige of these companies can be enhanced only by careful, economical and prudent financing. "Disregarding Stockholders"? "Mr. Fox should have been the first to welcome an opportunity to carry out such a plan. Instead, he has conducted himself as if these enterprises were his own private afTair, to be regulated by his own whims, personal desires and caprices, disregarding the many thousands of stockholders who hold his securities, and the many creditors and thousands of employees whose livelihood depends upon the proper continuance of these enterprises. "I pray that this court decree specific performance, compelling Mr. Fox to carry out the conditions, terms and covenants of the trust agreement, and I ask that this motion for temporary injuction be gi^anted, restraining and enjoining the defendants (other than Halsey, Stuart & Co., Inc., Stuart, Otterson and Electrical Research Products, Inc.). from going through with the Bancamerica-Blair plan, or issuing any securities thereunder, or doing any act or thing to interfere with the trust agreement Exhibit 'B' of the complaint herein; and that the court take such other appropriate action as it may, in its judgment, deem necessary or proper in the circumstances. "That no previous application for such relief has been made by me to any court or judge." Hit the Deck," 1st Run Record For Al Steffes Minneapolis — Al Stefi'es' Paradise, a suburban house, broke all records with his showing of "Hit the Deck." This film was shown at the theatre for a week and marked the first time any outlying house, otherwise than the Publix, owned and operated in this city, ran an offering for six days. It is reported that on the opening night all box ofifice records were smashed. It is further said that the week showed a profit far in excess of its usual quota. StefYes stole a march on Publix by running newspaper advertisements the same size as that run by the Lyric theatre (2 columns by 3 inches). The opening night, Sunday, found the street jammed with customers and not an unfilled parking space within blocks of the theatre. ''Sons O' Guns'' First U,A, Picture from Al Jolson Al Jolson's first picture for United Artists will be based on "Sons O' Guns," musical comedy, in which Jack Donahue and Lily Damita have been appearing on the New York stage. No director or leading lady have yet been chosen for the film. "Big Fighf in Spanish Hollywood — Arrangements have been made by Samuel Zierler of James Cruze Prod, to make a Spanish version of "The Big Fight," the English version of which is now being completed on the Coast, under the personal supervision of James Cruze. Ralph Ince will aid in making the Spanish version, and Andres de Segurola, opera singer, screen player, author and linguist, will adapt the story for the Spanish-speaking nations. More Talkaphone Installations Des Moines — Installations of Talkaphone sound-on-film equipment were made at three more Iowa theatres this week. R. C. Headley of the Opera House at Garden Grove, J. H. Johnson of the Princess at Stewart, G. G. Scott of the theatre at LeMars have bought this new equipment. Metro Exchange Opened Boston — Metro held a "house warming" at its new two-story exchange at Church and W^inchester Streets Tuesday afternoon. Notables from the home ofifice, together with a distinguished list of film folk from all over the East, attended. Mangan on Job in Lunnon London — Francis Mangan, Paramount's British presentation chief, has returned from Paris, where he was confined to the American Hospital, suffering from a nervous breakdown. Adams* Condition Serious Boston — J. K. /\dams. manager of General Talking Machine Co., is seriously ill.