Motion Picture Daily (Jan-Mar 1935)

MOTION PICTURE DAILY Thursday, January 31, 1935 Annual Choice Of Paramount Board Sought (Continued from page 1) committee, John Hertz and the Floyd B. Odium-Atlas investment group. These creditors placed five representatives on the new Paramount board. They are Fortington, Hertz, Odium, Charles E. Richardson and Stephen Callaghan. Referring to Motion Picture Daily's exclusive publication of the names of the 16 nominees for the Paramount board agreed upon by the principal creditors' committees, Medalie answered attacks on their fitness made by Archibald Palmer, stockholders' counsel, at Tuesday's session. He stated that while the group as a whole "perhaps leans a little in favor of financial representation and is light on management men" not one of the nominees "needs a defense." Favors Annual Election Medalie advocated the annual election of directors, however, on the ground that it permits men to remain on the board long after the interests they were named to represent had disposed of their equity in the company. He described the procedure as an "old and outmoded" method of corporate direction, and declared that stock interests at the end of each year should be permitted to elect their own representatives, eliminating annually those who no longer represented any one. "It is my understanding," Judge Coxe remarked, "that directors should represent all of the stockholders of a corporation rather than individual interests." "But," Medalie responded, "when protected by long terms and dulled by new profits, directors may easily forget that obligation, along with whatever lessons they may have learned from the past. They need an annual awakening, such as an election." "Perhaps this company, starting out new, needs some assurance of permanency in its directorate," Judge Coxe remarked. "The directors can secure permanency by serving well enough to be returned at annual elections," Medalie said. "If they can't serve that well they ought to be out." Reveals Alternate Proposal Medalie revealed that in discussions had with reorganization groups on the subject of the annual elections, an alternate proposal had been made which would provide for three classes of directors to be elected for one, two and three-year terms, respectively. He added that this proposal was not satisfactory to the creditors' groups he represented. Medalie also advocated a provision for cumulative voting of stock at board elections. Lansing P. Reed, of counsel for the Vanderlip debenture committee, stated he favored a board which would serve for the first three years after reorganization, with annual elections of directors to be held thereafter. He argued that Paramount bank creditors would receive 20 per cent of the company's new stock in settlement of their claims and would be required to liquidate it in the open market after a Attorney Palmer Turns Poet Archibald Palmer, representing common stockholders, read the new Paramount directorate, published exclusively in Motion Picture Daily, Monday, and found himself moved to issue forth with poetry. Yesterday, at the third day of the resumed hearing, his opus had been completed. Whereupon, Palmer handed out flimsies to attorneys for the bankers, and did not overlook Judge Coxe. The text: To Paramount You've been too long a banker's joy — Will you now become a Wall Street toy? Will you forsake your bright estate, Will groveling be your future state? How can you reach for yon far stars With shackled feet clamp'd by bankers' bars? How can the Genius of the Picture World Lead on with banner brave unfurl'd, With sparkling eyes and courage bold, If glowing soul be damp'd by bankers' cold? Does Paramount mean bonds and stocks? Committees named by canyon'd street your program mocks The thought of heights that yet remain For Paramount to strive to gain. Let not a program built by Greed bind you with hungry chains, In time of need, to prove a reed. Would you destroy the magic of a mystic weave, An Empire of the Land of Make-Believe, To satisfy self-seekers', narrow-minded, self -sought gains? Come, then, you Justice with the blinded eyes, and seize the reins And ride you well this Pegasus of brain and gold, And ride you like a knight of old Through pitfalls dark, and shadow'd dangers grim and stark. And drive without her templed walls The money changers who have claimed her halls, Who care naught for the Movie Art, Its Beauty, Wisdom — even Heart. Then Paramount will rise 'bove the common horde — And to its pristine kingly state once more will be restored. brief period. This could result in the stock being acquired by interests which would make a "political football" of the company, he said. Answering earlier advocates of voting trustees to be appointed by the court in place of creditor-elected directors, Judge Coxe dealt summarily with the proposals yesterday by declaring that he did not believe the court should be asked to assume even partial responsibility for the management of the company. He advised Medalie, however, that this did not apply to the latter's proposal for annual elections of directors, which he described as still "an open question" in the court's mind. Reed, whose committee represents more than 50 per cent of the Paramount bonds outstanding, voluntarily admitted to the court that Kuhn, Loeb & Co. appointed the Vanderlip committee members and recommended Reed's law firm as counsel. He defended major provisions of the plan and stated that despite the fact that his committee approved the bringing of suits by the trustees in bankruptcy to set aside the alleged preference of the bank creditors, he believed the settlement of the banks' claims contained in the plan to be fair. Reed advised the court that in every instance the important claim settlements contained in the plan represent the best terms which reorganization groups could obtain after lengthy negotiations and still retain the support for the plan of the creditors concerned. "Take one block out of this plan," he said, "and the entire structure may fall." The bank settlement was also defended by Morton G. Bogue, of coun sel for the bank group, who related that state court litigation against the bank deal of 1932 had failed, and that the new credit advanced by the banks was in short term loans and financed the production of 23 films which, he said, netted the estate $5,000,000 after its receivership. Opposition to the Paramount Broadway reorganization plan was answered yesterday by Sol Stroock, Julius Weiss, Saul E. Rogers and Austin Keough, who advocated retention of both the Paramount Bldg. and theatre after reorganization. Hearing of opposition to the Paramount plan was concluded with brief objections to the provisions for stockholders, described as being "too favorable," by Sam Spring, counsel for holders of claims aggregating about $2,225,000. Hearing of advocates of the plan will continue today, after which the court will take it under advisement and will either give it tentative approval or recommend changes. The final plan will then go out to creditors who will either assent to or reject it. If sufficient assents are obtained, it will come back to court for final hearings before being placed in effect. Para. Is Launching Contest on 'Ruggles' Paramount is putting on a national contest for the best theatre campaigns on "Ruggles of Red Gap." A total of $2,600 will be distributed to winners, with $500 as first prize ; $400, second; $300, third; $200, fourth; $200, fifth, as well as 20 prizes of $50 each. The contest opens Feb. 15 and runs to April 12. Chicago Dime, Dual Ban Goes To U. S. Court (Continued from page 1) Loop. Virtually all distributors are also named as defendants. Roden's suit charges the issuance of a so-called blacklist by the Chicago Exhibitors' Ass'n. to exchanges in which houses charging 10 cents and playing duals are named. Validity of the current understanding between exhibitors and exchanges on 10-cent admissions is challenged, with Roden claiming he has been damaged to the extent of $300,000 under the Sherman anti-trust law's treble damage clause. Roden's lawyers asked for a temporary injunction. A hearing on this has been set for Feb. 15. Both plaintiffs informed Motion Picture Daily that there was no connection between their action and the Federal indictments recently returned in St. Louis. They also said their suits had been filed independently of each other and without outside support. The action is frankly viewed with alarm by exchange heads. Branch managers are awaiting instructions from New York. FHA May Use Films To Boost Its Work (Continued from page 1) reached the stage of formal negotiations, it was said that it had been discussed with representatives of several producing companies and that it was anticipated a definite plan would be worked out shortly. So far the only points decided on are that the pictures should be shorts and be nationally distributed. Determination to resort to films is believed due to a desire to pep up the Administration's housing campaign, which so far has fallen short of expectations. Holds N. E. Biz Spotty Theatre business in New England is spotty, George Cruzen, division manager for M. & P. with nine houses under his supervision in Connecticut and West Massachusetts, stated yesterday. He added good pictures continue to draw, but there are not enough of them. Cruzen attended a code hearing yesterday and left for New Haven last night. "Rumba'* Goes to Rivoli "Rumba," Paramount release, follows "Clive of India" at the Rivoli. "Wings in the Dark" opens at the Paramount tomorrow, to be followed by "The Gilded Lily." Fire in Portland House Portland, Ore., Jan. 30. — Projection equipment of the Yeager, suburban, was destroyed in an early morning fire today. Glendon Allvine Resigns Hollywood, Jan. 30. — Glendon Allvine, associate producer at Radio, will leave the company Saturday. He has other plans in view.