Variety (Sep 1933)

TneBdaj* "Septciiibcr 19, 1935 riCTIf KES tAKIETY CODE AIRS ALL BIZ'S WOES Keougk Par Att y, TeDs About Cash Bonuses to Execs; More Due on Humey Setlkment Et€.| BRINGS OUT n Inside Information on Par's aet- ' Element of the A. d Blumenthal BUlt in 1932, papers "and circum- stances of which Saul B. Rogers in- sists heis been surrounded by much eecrecy, promises to come forth for first tlnie tomorrow (Wednes- day) on resumption of examination of officers of Par under Its bahk- riiptcy. If the papers are not pro- duced then, as formally requested of Austin C, Keoueh last week, it Is hinted thartr efforts will be made to, force them from flies or safe by way of a subpoena. Question of why Par made the •etUement of $36,000 in the Blumen- thal action, alleging violation 6f in- denture of bonds when the bonds held by Blumenthal at that time find sued under were wortli only $7,500, arose last week at ah ad- journed examination of Par offlcials, along with data for the record con- cerning salaries and bonuses of Par ©xecutives and other matters. Substituting on the stand for Balph Kohn, who was in Washing ton, Keough, Par's legal head, was lihable without papers and records before him to discuss details in con- nection with the Blumenthal settle- ment except, to his' recollection, that Blumenthal received $25,000 and his attorney, Nathan Burkanv $11,000. lumey Settlement Both Rbgers and Zirn attempted to get to the bottom: of the Blumen- thal settlement, but with little suc- cess. Both wanted to know for the jecord why- the settlement was made in the first place, when many other similar actions of bondhold- ers were subsequently brought but were not settled. Keough, who said he had not handled the Blu- menthal matter, stated that the set- tlement was made to avoid iappoint- mentpf a receiver as asked for aiid that discrepancy in amount paid off as against market value of Biumey's bonds was explained by; Par's feeling that a receivership would have been both dangerous •and costly at that time. Not • satisfied with this explana- tion, a,ttorneyS wanted to know ex- actly what Par got for its $36,000 Keough was asked if it may have been due to Blumenthal's political influence at the time. He's a close personal friend of Jimmy Walker, then mayor. Keough said that it wasn't. Par's legal head, admitting the settlement, said, however, that the . comp9rny _ ffelt the Blumenthal action was without merlF. ebnsiderabie haggllner resulted over efforts of Rogers and Zirn to learn why all papers, including the original Blumenthal :bill of Com- plaint filed in the Supreine Court, had been removed from the. flies 6£ the court oh a special stipulation signed by a judge tO; permit that. The papers thils have not been available to attorneys for other bondholders nor to creditors of Par; anyone else. Charging secrecy in the trarisac tlon, Keough said he believed Blumey and his attorneys had been pledged to secrecy on the settle ment, its terms, etc. Keough said that he did not vemember if any per.sonal relief was sought by' Blu- menthal.. but believed the suit to be repvoRentatiYe. Rogers says he has made efforts to ROt the original complaint, but has been unsuccessful in that direC pors, nlso, which have not been pr.o- ducocl to date and wrote Ralph Koh»l a resistered letter detailing 15 siiltj^'-.'ts on which he wishes in fonnnlioii, (xt the sanW time de •■nvMvliirr lv.-()luction of records i; illi i' > 'ind Zirn rej>reftent f,v.'oui.c;iu;'a pjigP 2.'{)' Znkor Out of Hosp Holljrwood, Sept. 18. Adplph Zukor will return today (Monday) to the Ambassador hotel, Los Angeles. He has . been In. the Cedars of I^banon hespital for almost a week. Suffering, from gastroenteritis. 2 MILLION $ CLAIMS VS. PARI Every Aspect Cov^edl anid Every Branch of tbe In- dustry Had Its Say Via More Than 100 of Over 200 Authorized Spokes- m&k- —Marathon of Pre- liminary Palaver on Film Code Hearings —^ Rosen- blatt's Pointed Inquiries Brings Miuch Hedging REVIEW OF HI-LITES By Tom Waller Washington, Sept 16. Industry woes of 2& years, got on Reorganization of Paramount I the NRA record !n millions of which is being planned for an early L |^^„ written words in just 18 hours. That record is now avail- able to everyone including legi tors, who for years have been wait- No Film Code Yet, Distribs Get Permission for Further Confabs Regarding the Exhibs' Cheer from Minn. break may be temporarily curbed through the filing of two claims, each for $1,000,000, against Para mount on behalf of General Talk Ing Pictures and the DePorest Phonofilm corporation. DeForest is a subsidiary of GTP. The claims amounting aggregate- ly to $2,000,000 are based on al ing for just *uch a document. Thou- sands of words more are being re- corded now behind elosed doors. If I these private sessions don't ma- leged recording and reproducing I terialize into something more than patent Infringement by. Paramount, what was aired publicly .there may Whether allowed or not by Referee be other public hearings and more H. K. Davis, the filing of the claims, words. according to legal interpretation, Deputy. Administrator ^ Sol A. would niean ^hat same must be lit- Rosenblatt had this. in mind when lgated< That means that the Fed- eral Court would have to pass on the matter and that a trial of the issues might be forthcoming. However, the reorganization of Par can proceed regardless, with maybe Pai" posting a bond to cover the possible outcome of such a suit if litigation should result. That's according to inside interpretation. In essence the filing of the claims by GTP and DeForest amounts to a request to, the Federal Court for the right to sue Paramount on the causes alleged, paramount. he didn't close but simply ad journed to an indefinite date the public hearing on Thursday (14). He had authorized 209 people to speak at this but only around 100 stood on their feet. There were many reasons wliy .the other hun- dred remained, mute. First the in- dustry factions were smart enough to admit that too many speakers, like the excess of cooks, might eon [ fuse their part of the record. Even with the voluntary cut down, some of the boys designated to talk were caught unprepared by being in bankruptcy means tbat the j being called ahead of time. This company can't be sued except [ was evidenced the first day when through consent of the court, acr major studio managers started talk- cording te interpreta.tl.on. ling about labor until Pat Casey, The Legal Complications representing the producers, was What can happen In such a case able to get on the record that he Is open. It is understood that Par J ltnew nothing about such briefs and is about set for reorganization and I I^os^^l*^***^ gave in any adjudicating of the GTP and DeForest claims, > may Involve ERPI, which la a creditor of Par'is for something like 11,300,000. Means that lo get around the GTP and DeForest thing, Par may ask ERPI to defend and seek adjudication on some kind of basis that if the claims be proved, they be deducted from ERPI's general claim That's only on analysis and as the' GfTP and DeForest claims were only filed, last week, what official cognlzahce has been iaicen of The thing by Par is so far unknown In other ways, the GTP action amounts to. bringing a second suit on the interests (Continued on page 66) Minneapolis, Sept. 18. Every week brings its batch of 'better times' items. The local Paramount exchange during its .Paramount Week reported its biggest business in^ pictures played and receipts since August, 1931. Business at the Warner Brothers' exchange has been so big that it hasi been neces- sary to employ three addi- tional office helpers and to write to the New York main office for authority for an Ad- ditional, two, according to Mike Comer, Office manager. F-WC'S AUCTION TO INVOLVE $5,000,000 Los Angeles, Sept. 18., . Auction sale of all properties of F-WC theatres Will be held by trus- tees of the bankrupt Oct. 2. This will liquidate around $5,000,000, the largest part of which is stock West Coast holds in subsidiaries. Understood .representatives of Chase National will buy In the property. Trustees after auction v/111 continue until around Jan. 1 to satisfy claims against bankrupt. Laemmle Sailing Hollywood, Sept. 18. Carl Laemmle sails from New York Sept. 22 for two months abroad with Jack Ross, his secre- tary, on the^'Ile de France.' He will avoid the Nazian belt and for the first time on these trips will not visit his native town of Liaup- heim; Washington, Sept. 18. The Government's hope of whi ping a film code, ihto shape having clauses offered by its vari- ous branches correlated by Sept. 20 faded Saturday (lis) when istribu- . tors are reported to have; asked arid, obtained permission to t<^ New-York, and get authority, If pos- sible, from their -.arious direc- torates to treat some of the more unusual exhibitor demands which would set iipj everyone hpw con- cedes, at brand-new method, of doing business in the film industry. Certain of. the exhibitor leaders with a good major insiije ytiio aire remaining until next Saturday, when the committee business here will start all over again, early this morning ventured the observation that at last the big boys are fright- ened and want the Interlude als an opportunity to niuster their forces. Certain major executives wjho were reached at their iSfew York homes early Saturday morning (16) admitted confidentially they were weary of factional battling and that the right to buy was one of the rea- sons for them seeking the respite. There was aii all-round confusion manifest. Home offices Saturday were not expecting to see their rep- resentatives back until tomorrow (Tuesday). Some of the boys who slipped out of town came back in time for the general meeting sched- uled for Sunday only to find the city virtually abandoned by picture peo- ple. Many of those who had de- parted Saturday ' night were home with the Impression they will hiavo to return on Thursday. After being allowed only a half hour for lunch on Saturday, exhib- itors were kept waiting for three hours that afternoon while the Deputy Adihlnistriitor was confer-* ring with the distributors. When he appeared, Rosenblatt—exhibitor attendees reported today—Informed them everything was adjourned un- til the distribs got together with their directorates, bnportant RKO Personnel Shifts Hinted Before Any Reoi^. Plan There's miicH "apprehension around RKO that Important per- sonnel shifts are in the offing be- foTe the company reveals any re- repBoducing infringement such l organizatlon plan that Will take it as It once brought against the I out of receivership. Much of the Stanley Co. of . America, in Wil- apprehension is hinged around the mington in which the Ries patent theatre end. Mostly it's because of was Involved. Case was won by GTP in the lower court but the Cir- cuit Court reversed the decision and was upheld by the U. S. Su preme Court. However, the recording thing was not Involved then, which that angle a hew one, the unheraldtC manner In which Al Repch walked Into RKO one morn- ing and took, a desk. , Harold B. Franklin and Phil Reismkn are the only two top exec^ left who came in with the reor- makes | ganization of RKO before receiyier- ship. Louis Cohen who resigned Additionally by filing the claims about two months ago from the real ill New York means that GTP and estate sectc- to develop private DeForest is looking for an opinion business may leave any time now. on the reproducing thing In an-I He was to have.left; Sept. 1, but other jurisdiction, other than Wil- was asked to remain by the com- fflington. Legal tiechnlque here Is j pany heads until the firm found a that if the New York jurisdiction succes.^or. The man chosen is Al finds for GTP, as opposite from Reoch, who came in around a week what the Circuit Court found^ in ago. Wilmrffgton; nikeXy^ then carry the whole matter once is known as a figure man and one again to the U. S. Supreme Court of the best, they say* ' He is cred- because of the difference in judg- Ited with having done' much: or mehts. Tiiat depends also upon most of t'.ie arithmetic for David what happens to any appeal which fcJarnoff both before and after Sar- may be taken by whoever is de- noff got in touch with RKO. fendant. Par or ERPI, in the Cir- " It's pretty well ofiieved around ciiit. Court, New York. I that Rooch came in without the paftleiDila.r advice of - Harold Frank llrt. That Franklin knew about Reoch's impending advent, how ever, looks sure. Reoch used to be an exec of RCA Photophone. He is stated to have been the mathematical wizard who X-rkyed the financial backbone of RKO for RCA when that company looked to conquer the film biz,. That was before receivership anywhere in the biz and even RKO. "' ince. then. RCA has accumulated a couple of i;igh Class active part- ners. They are .the Rockefeller In- terests- and Mike ^eehan; The Rockefeller partnership, of course post-dates Mjehan. but Meehan was not actively c6ncerhed with RKO operation until a few months ago. That Reoch's coming into RKO should spring that feeling of ap prehension is just one of those things. There was no such appi'e hch'sl on ""Avh eh^"~J.~ came in as executive v.p. pro tem at the invitation of M. H. Ayles worth. McDonough also is from RCA. There probably shouldn't be any more query aboiit Reoch's fu- ture position ia RKO than Mc Donough's but the biz is vorv sfn sitive the.sj* day«. UNUSUAL C(M)P BY F-WC FOR UA, FRISCO San Francisco, Sept. 1ft. Fox-West Coast has turned over to the local United Artists four of the former circuit's outstanding pictures of the forthconilng season In one of the oddest deals yet re- corded here. Neither side will tell why foui* ace pix should be turned over to the deadly opposition, .but it's re-, ported as an order sent through by Charles Skouras, who's, doing.^ it. in return for an unnamed ;favor from Joseph M. Schenk. First of . the pIx Is already In the UA, 'This Day and Age* (Par) after haying been; billed .and trailered. at the Fox Paramount, directly across Market street from UA. Other- films, are 'Power and USlory* (Fox), 'Berkeley Square' (Fox) and 'Cap- tured' (WB). All will piajr UA at the same percentage terms under which they were to show for F-WC. Hughes' Multicolor Under the Hammer Los Angt'le.."}, So ^^]0fffirff^iinTiidati.i5n"^of?:thJ^^^ ment of the Multicolor studio i» hrlnt,' cffcc'tocl by the hammer route by ITfiward Hughes. King. Charney fllsprtsfid of a part of the outfit uh- flf-r n perr-c'iitage agreement. ReniJiiridor of llio •$250,000 plant will hf> turni^d ns'fc to the auc- HoilffT