Motion Picture Daily (July–Sept 1938)

MOTION PICTURE DAILY Thursday, September 29, 1938 RKO Delays Halt Decision On Personnel (Continued from page 1) only at the invitation of the court. '•Another and far more significant ira!^)rs' quarter, a new sentiment has appeared indicating a desire for a delay in the consummation of the reorganization at least until the present European crisis has been resolved. This sentiment stems from the obvious difficulty of marketing the new RKO securities which would be certain to follow the outbreak of a general European war with its attendant depressing effect on the securities market here. Underwriting of the new securities has been completed by Atlas Corp. already and they are being offered to subscribers. The general uncertainty bearing on a delay in the consummation of the plan is said to be chiefly responsible for the failure of the principal creditors to confirm board and management selections for the reorganized company. The delay may be momentary only and the trend of today's initial hearing on the plan before Federal Judge William Bondy may make possible the overdue decisions on these twin subjects within a day or two. On the other ha-d, any situation which made an indefinite delay in the consummation of the plan inevitable would bring about a correspondingly lengthy postponement of board and management decisions. Seven Board Member Designated Seven board members appear to be definitely slated for designation at this time. Thev are David Sarnoff and Lunsford P. Yandell for RCA; Nelson Rockefeller and W. G. Van Schmus for Rockefeller Center ; Floyd Odium and Peter J. Rathvon for Atlas Corp., and either John Moroney, attorney, or Lawrence Green, investment broker, for unsecured creditors. Additional management men, when set, will be added to this list for a total of either nine or 11 members. Today's hearing on a motion to confirm the report of Special Master George W. Alger approving the plan is expected to develop opposition from minority creditors only. The major creditors are in agreement on basic phases of the plan. Principal objection to the master's report is expected to come from H. Cassell & Co., brokers, who hold $200,000 in debentures. Nathan Rosenberg, attorney for Cassell, contends that the report is unconstitutional because it deprives debenture holders of their security without adequate compensation. The U. S. Attorney General's office will be represented at the hearing and he is expected to defend the constitutionality of section 77b of the Bankruptcy law. Mr. Rosenberg is expected to argue that the stockholders should not be permitted to participate in the plan until debenture holders are fully paid. In support of this contention, Mr. Rosenberg will point to the master's original report rendered last November when this viewpoint was upheld. Mr. Rosenberg will renew his plea for an allowance of stock in exchange for debentures which will permit an immediate sale of the new stock at a See $600,000 Net RKO's earnings report for the first half of 1938 is expected to show a net in excess of $600,000. Theatre earnings, which comprise the bulk of the net, have been slightly below earnings for the first half of 1937. The picture company is believed to have shown a loss during the first six months, although it has been operating at a profit for the first part of the current half year. Low Funds Slowing Wage-Hour Rulings (Continued from page 1) effect for all industries. In all probability, it was said, no committees will be set up for industries where the minimum wages now are so far above the 25-cent minimum which is to apply during the first year of the law to make improbable any agreement to raise them further. For some time to come, at any event, committees will be confined to those industries where the greatest need is seen for improvement of wage conditions, as in the textile industries, for which a committee already has been set up. FWC Giveaway Test Will Run 6-8 Weeks Los Angeles, Sept. 28. — Charles P. Skouras estimates that in six or eight weeks the Southern California "no giveaway" experiment by Fox West Coast should show that the abandonment of giveaways and premiums is worth while. It is too early to tell yet, he said, but major giveaways, such as autos, radios, refrigerators and the like have already been eliminated throughout the southern division. Minor premium nights and variations of Bank Night are continuing in a few houses where contracts for such games are still in force. The southern division houses are engaged in educating audiences not to expect premiums of any kind, meanwhile directing attention to the "Movie Quiz" contest. Major giveaways have been eliminated in Fox West Coast's northern division, but some form of cash premium, particularly Ten-OWin, is being continued. Sets Oct. 6 for Hearing Federal Judge William Bondy yesterday set Oct. 6 for a hearing on the petition of Wicker, Neilson & Riddell for an allowance of $2,000 for services rendered as attorneys for Alfred West, who started the original equity receivership suit against RKO. price equivalent to the par value of debentures plus interest. He will point out that the Government suit and the foreign situation make an investment in stock hazardous. Another issue to be raised will be the voting power of the various classes of stock. It is contended that general creditors will receive 14 shares of common stock for each $140 in claims held. This will entitle, them to 14 votes while debenture holders who are to receive one share of preferred and five shares of common for each $140, will have only six votes. Clean Up Theatres After N. E. Storm (Continued from page 1) and the damage was estimated at $3,000. The Colonial at Newport, R. I., still closed as a result of the damage, is the only E. M. Loew theatre not open. Reports on more secluded houses are slow coming in since 175,000 telephones are out of order in New England. Film shipments are going by circuitous routes to many theatres, where washouts are delaying the resumption of train service. Eleven Connecticut Theatres Are Closed Eleven theatres in the New Haven area are still closed as a result of the storm which struck last Wednesday and it will be some time before they can resume operations, Ross Federal was informed yesterday by its New Haven office. A total of 47 houses in the area were put out of commission for varying periods due to lack of power supply, fire, flood or wind damage. Of the 11 damaged, the Garde, New London, suffered fire and flood damage, while the others, it is reported, were flooded and battered by the storm. These are the Easthampton, Easthampton ; Colchester, Colchester ; Moodus, Moodus ; Glastonbury, Glastonbury ; Saybrook, Saybrook ; Strand, Mystic ; Broadway and Palace, Norwich ; State, Hartford, and Finns, Jewett City. Loew Damage $6,000 Loew executives yesterday estimated that the hurricane damage to New England theatres totalled about $6,000. All houses have reopened with the exception of the State in Providence which is waiting for power lines to resume. Rush Providence Repairs Providence, Sept. 28. — City officials here indicated today that the resumption of power may be expected on Sunday or Monday. Downtown houses have rushed repairs to motors, carpets and seats which were damaged by the flood. 'Snow White' Sets Record The RKO home office reports that "Snow White and the Seven Dwarfs" has established an all time box-office record at the New Gallery in London, where it has grossed $500,000 and is now in its 31st week. Goring Quits Theatre Pittsburgh, Sept. 28. — John Goring, for the past two and one-half years manager of the Shea-Hyde Fulton, has resigned. He is considering taking over a local situation. Change "Murder" Title Hollywood, Sept. 28. — "Secret Service of the Air" is the new title of the Warner film formerly known as "Murder Plane." Take Washington House Washington, Sept. 28. — Jack Thoman and Travis Levy have leased the Belasco for showings of foreign and other selected films. A formal opening was staged tonight. 3 All Phases of Trust Suit Up At Conference (Continued from page 1) Department. While definite information regarding the conference was lacking, it was understood that, freed from the formality which would surround a meeting under more official conditions, the group discussed all phases of the situation, including the attitude to be taken by the companies with respect to acquisitions of additional theatres while the suit is pending. It was indicated informally that the conference was designed to pave the way for definite action by the companies along several lines — not only with respect to further theatre additions but also as to stipulations to be made and in laying the groundwork for a consent decree if the majors decide to take that course to avoid litigation. At the Department, the refusal to discuss the matter was explained as due to the fact that the whole affair was arranged by Colonel Donovan. At Colonel Donovan's office, attaches expressed inability to give any information other than that the Colonel had not been in the office all day. New York Attorneys In Attendance Among the New York attorneys who came here for the conference, in addition to Col. Donovan, were John Kaskey and Ralph Harris, counsel for 20th Century-Fox ; John W. Davis and J. Robert Rubin of Loew's ; Thomas D. Thacher and Austin C. Keough of Paramount ; Robert W. Perkins of Warners and William Mallard of RKO. Mr. Arnold was accompanied by Paul Williams, who is directing the case. In an informal discussion of the meeting, representatives of the companies said they were chiefly interested in matters of procedure and in ascertaining when the case would come up. They denied that any "gentlemen's agreement" had been reached regarding theatre acquisitions during the pendency of the suit, and pointed out that this was the first of what may be a number of meetings and the matter had not progressed sufficiently for any conclusions to be reached. In other quarters it was said the group explored the possibilities of securing further extension of time for the filing of answers to the Government's complaint. The answers are due early in November and it has been represented that the companies felt more time would be necessary to work up their briefs. To File "Birth" Briefs Albany, Sept. 28. — Both sides will submit briefs on or about Monday to Supreme Court Justice Pierce H. Russell on the application to secure reversal of the ban imposed upon "The Birth of a Baby." Former Supreme Court Justice Ellis Staley, representing the American Committee for Maternal Welfare, Inc., and Charles A. Brind, law director for the Department of Education, as attorney for the Board of Regents, have exchanged briefs here.