The Exhibitor (1966)

Columbia Team Fights Proxy Fight Looms As Management Rejects Bid By Dissidents To Take Majority Of Board Seats NEW YORK — Columbia Pictures Corpora¬ tion, by action of its board of directors, rejected the demands for immediate control of the company by a group which asserted it had pur¬ chased sufficient stock to constitute control. The board’s statement was “that on the advice of council we have advised the group seeking control that our obligations under law do not permit us to turn the company over to them.” Demands for control had been made on the board by a group including the Banque des Paris et des Pays Bas, which had recently made a tender offer for Columbia’s stock, The Madison Fund, M. M. Clairmont, Mrs. Sylvia Martin, and Gerald Rivlin. The spokesman for this group was Edward A. Merkle, president of the Madison Fund, a mutual fund which reportedly will take some of the shares tendered. With the company refusing to give a majority of the board seats to the outside holder groups, a proxy fight for control of the company could follow. The annual meeting is slated for Dec. 21. Combined, it is estimated that dissidents hold more than 1,100,000 of Columbia’s 1,967,000 common shares, according to Mer¬ kle. A Columbia spokesman estimated manage¬ ment’s strength at 700,000 to 800,000 shares, with all nine Columbia directors holding a total of about 120,000 shares as of last Decem¬ ber. Also, Hallgarten and Company, invest¬ ment bankers, of which Donald S. Stralem is a limited partner, held 141,000 Columbia shares for the account of its customers last December. Stralem has served on the Columbia board as a pro-management man for more than 20 years. It was said that the management was first asked to yield six of the nine seats, with three management men retaining their seats: presi¬ dent Abraham Schneider, Stralem, and Jerome Hyams, executive vice-president of Screen Gems, Inc., 88.5 per cent owned Columbia subsidiary. It was also stated that the outside groups subsequently agreed to a proposal to permit the board to be expanded to 10 seats and let Leo Jaffe, executive vice-president of Columbia, remain on the board. The dissidents have been unhappy over man¬ agement’s performance, charging that Screen Gems’ high earnings have been offsetting alleged losses by the parent company. Col. Management Sues; Retains Nizer For Fight Columbia has filed a suit in Federal District Court in New York charging that the French bank is seeking control of the film company in violation of federal law. The suit charges that rules of the Federal Communications Commission bar a foreign company from controlling a U.S. concern that has broadcasting licenses, and states that Co¬ lumbia subsidiary Screen Gems, Inc., has tele¬ vision stations in Salt Lake City, New Orleans, and San Juan, Puerto Rico. Skouras Heads Committee For N.Y. Sunshine Coaches NEW YORK — Spyros P. Skouras, chair¬ man of the board of Twentieth CenturyFox, has accepted the chairmanship of the Tent’s Sunshine Coach committee. The Tent presently has three Coaches aiding youngsters. The use of these vehicles makes it possible for handicapped children, both walking and in wheelchairs, to be transported for needed medical attention and therapeutic assignments, as well as for recreational sessions. The first Coach, donated by Universal Pictures’ president Milton Reckmil, was presented to the New York University In¬ stitute of Physical Medicine and Rehabili¬ tation, otherwise known as the Rusk Foun¬ dation, almost two years ago. Last year, the employees of Warner Brothers Pictures banded together and bought the second Coach, with air conditioning, which went to the New York Philanthropic League. In addition, Eliot Hyman, president of Seven Arts, sponsored the third Coach that the Tent presented to United Cerebral Palsy of New York. Columbia president Abraham Schneider said he has retained Louis Nizer to represent it in the fight. Columbia contends that the Madison and Dreyfus funds agreed to buy part of the 675,000 shares that holders of Columbia stock have tendered to the French bank. The suit says the Banque de Paris et des Pays-Bas agreed to buy at least 350,000 shares, Madison Fund 100,000 shares and Dreyfus Fund 190,000 shares. According to Columbia, Madison Fund, a closed-end investment company, and Dreyfus, a mutual fund, are in violation of FCC rules, and that they each own more than one per cent of the shares outstanding of Metromedia, Inc., which owns four tv stations. In addition, Madi¬ son Fund is said to own more than one per cent of the stock outstanding of Wometco Enterprises of Miami, Fla., which controls three tv stations. Columbia also contends the French bank violated federal law by omitting vital informa¬ tion in the public tender offer it made for Co¬ lumbia shares this month. Another charge in the suit is that the Drey¬ fus and Madison funds violated the Investment Company Act of 1940 by allegedly failing to apply to the Securities and Exchange Com¬ mission for approval of a plan to take over Columbia for the purpose of liquidating it. The suit says Serge Varangot is both a direc¬ tor of Madison Fund and manager of the stock market department for Banque de Paris, and that Edward Merkle, head of Madison Fund, is an agent of the bank. The court is being asked by Columbia to bar the dissident group from voting their stock at any regular or special meetings of the com¬ pany. Schneider said that he intends to protect the interests of all holders, as well as the company’s relationships with producers and film exhibi¬ tors, and its obligations to the public. For Control Carolina Exhibitors First To Adopt NATO Identity CHARLOTTE — One of the oldest exhibitor organizations in America, Theatre Owners of North and South Carolina, Inc., founded in 1912, has become the first NATO affiliate to incorporate “National Association of Theatre Owners” in its association name as suggested by NATO president Sherrill C. Corwin. Action officially changing the name to “National Association of Theatre Owners of North Carolina and South Carolina, Inc.,” was taken within one hour after Corwin had addressed the regional convention at the White House Inn in Charlotte. In his inaugural address delivered at the first convention of the National Association of Theatre Owners in New York City on Sept. 28, Corwin had suggested that every regional exhibitor association should identify with NATO. “It is a new concept,” Corwin stated, “but in doing so will achieve the identification and prestige that this great organization must have if it is going to acquire the imprimatur of government, press, and public.” Corwin repeated his plea to the Carolina convention by expressing “the hope that when you con¬ clude your deliberations today you will have agreed to name this organization the National Association of Theatre Owners of North Carolina and South Carolina.” At the stockholders meeting which followed Corwin’s address, a resolution was proposed and unanimously adopted that the corporate name be changed to “National Association of Theatre Owners of North Carolina and South Carolina. Inc.” The stockholders meeting also held the annual election of officers and directors of the association. The following were re-elected: President, Jimmie R. Bellows; vice-president, Kenneth Richardson, Jr.; chairman of the board, Harry M. Pickett, Jr.; and executive secretary and treasurer, Mrs. Lila C. McClel¬ land. W. H. Hendrix, Jr., was newly-elected a vice-president. “491” Wins Court Test NEW YORK — In a two-to-one decision, the U.S. Court of Appeals for the Second Circuit reversed the findings of a lower court and ruled that the Swedish film, “491,” was not obscene. The film, which was imported by Janus Films, was seized by Customs in October, 1964, on the grounds that it was obscene. Janus appealed the decision. The new decision does not bar state censor bureaus from ruling on the question of obscenity as it applies to state laws. Strike Hurts Inflight NEW YORK — David Flexer, chairman and president of Inflight Motion Pictures, Inc., stated that last summer’s 43-day airline strike slashed the fiscal first quarter revenue of the company to about $ 1 ,260,000 from the year earlier $2,183,000, and earnings, if any, to about the break-even point from $323,000, or 55 cents a share, a year before. He said that the effects of the strike may be offset if negotiations currently under way with two airlines result in installations that would become operative next March. 6 MOTION PICTURE EXHIBITOR November 2, 1966