Variety (Dec 1934)

TnMdafi Deeeiibber ISt 1934 FICTVBES TiUnrr LA. Mooo lioa AniereleB, Dec. 24. Sale of Fox West Coast Thektirea : bankrupt estate to National The- atre Corp. for a sum apprbxlmatlhg flTiOOCf.OOO, aM ordered by Referee \ Earl "El : Mbsa, was confirmed on Saturday (28) by U. S. Plstrlot Court Judge George Cosffrave.. The Court, to wbleh protest of sale had been taken on \,Tlt of review by attorneys for Marshall Squiare The- 'atres and Harry Ij. Hartmaii: of the San Dleso Orpheum theatre^ did hot «laTiefftte^n-the-declsl6n t. - Attorneys Jules C. Goldstone and Joseph Ije:wtnsoh foi* tW; protes- tahts announced Immediately ; that they would carry their challenge up ; to the v. S. Circuit Court of Ap- peals aiiidL; It hecessary, to the U. S. Supreme Court. They were given ID days to perfect the appeaL : : Immiidiate dlBpoBition of the . F- WC assets w'as to in Judge Cos^_ grave's legal lap oh certiflcaie of' review: from the sale ;order granted two weeks ago by Rejferee in Bank- ruptcy Earl E. Moss. AttomOys Goldstone and Liewihsoh: for Mar- shall Sq. Theatriea and Hartmah. who dpe seeking to prevent tranisfer of the circuit's properties hhtll after trial ;of federal. damage liuits; including the F-WC trustees among defendants, charged violation of the Sherman and. Clayton -anti -trust actsr ■ ■'".' . ■ - _. : _^ Opponhts' Proteste . Appellants, In carrying the case up on review, argued that the, as- sets _sl]LOj^ld be kept. Intact _ under responsibilliy of the trustees so that Judgment, in case It was recovered by. the plaihtifta in the damage aults, would be collectible. If the estate passed into' the hands of Na- tional Theatres and the assets were absorbed in reorganization cbmbi- natlons, recovery would be dubious. Attorneys (3oldstone a nd Lewlnson cohtehdediV ■. In 8uppx>rt of their challenge of sale, counsel tried .to prove that Referee Moss's a^rmatlon of the : purchase bid did not cohstituta a valid sale because It lacked a proper cash consideration, and that the so- called dividend of lOOe on the dol- lar to all unsecured creditors was not actually a dividend. . Attorneys Waltet K. Tuller, B. F. Bhipman and Oscar Lawler, who " represented the trustees, Charles R Bkouras; Charles Ci-Irwin and Wil- Small Gets Busy on: ^ New I^eliance Prod. Hollywood; Deb. 24.. X^vrard Small is starting produc- tion plans rolling for his new group of features to be made for Reliance during 1936. Producer returned last Week from New York, accompanied by Sam Wood, Louis Weltzenkom and: Lillian, Hellman. . ■ Wobd will dkect one for Reliance. Weitzenkorn is slated to write an original titled 'Washington Corre^ spbndent,' while Miss Hellman will adapt 'The Melody Lingers On,' Lowell Brentano's novel recently secured for .pictures by Small. . ■ ; Minneapolis, Dec. 24. . . Local film ezphanges . report that 1934 showed business Increases ranging from 25% to B00%. . , Improved general trade conditions and better product are' glveh credit for ths big boosts More income is being secured from, percentage deals because of; thb fact that theatrs at- tendance has been considerably larger... Also, more jtheatrsa ire. op?, erating on fuller schedules, making for a bigger number of play dates. - Legalization of Sunday films in North Dakota will add. considerable revenue to the takings of local ex- changes, exchange managers point out. Everybody all along the line is optimistic over the 1935 outlook be- cause of Increased employipent^ tlo- Ing. from plentiful snow so far this winter and the outpouring of federal funds Into farmers' hands. Smalley 1^ -Washlngtonr-DeCr-24r Owners $ee]c lO Years* Pr of it—Practically No Turn - Oyer of Theatres Due to Prices NO DARK HOUSES ent at roniise Chicago. DeiB. 24, That trade Is pointing upward in this territory Is indicated by the booming of . tfaeatra—realty prices throughoait Chicago and,;th6_inldi. west; Houses which were on the market last year and tha year pre- vious at almost any prlca ar« now far out of redch. They've attached J}allo6ns-40 r-tbeL—selling Ami !«>««»>- hold prices of ths great hutjOrity of theatres, >ylth asking tenins now four and five times greater than they were In; tho.l93.lTW3| «J^^!^.^^: Aaron Jones, of Jones. Ldnlck & Scbaefer, for examplSb lis anxious to. secure suitable theataw: properties in tfails town.. Ho negotiated with some; 85 different owners and the- atres here and was unable to make one deal. Not for Sals Loew's at. preseht la understood to be considering theatres in the various neighborhoods as tiio start of an invasion camiMtign. but so. far not one house has changed hands. Harry Balaban has been. trying to spread \hls circuit bt neighborhood theatres and even ho has been un- able :t:o.-buylv.at_th«_pjlcesJluAl^ recently. . In Chicago today there Is hot one closed nabe theatre. Balaban . & katz had a cpupio dark, but they are ail reopened today.. Even the white elephant Paradise Is allvo and operating at a profit today. Houses which were considered liabilities a cou ple of years ago are today llg ht- ed and going, ^ About the last theatro deal made In town which was considered a pretty good buy was by B. St K. for the leglt Apollo and CtLcidt on Ran- dolph, street. Reported that B. & K. got those theatres ch a tworyear leaise; with bptiona and at $600 a week rental. This deal was made eariy in 1934. Theatre-seekers find that the op- (Contlnued oa pago 8i). . E. IV Lowe (Not ah Actor) ^^^^ Fox Producier , , Hollywood, Dec. 24. Edward T. Lowe has been upped to status of associate producer at Fox, to work with Sol M.; Wurtzel at the Western Averiue plaint. He will handle as his first assignments 'Charlie Chan's Danger* and 'Secret Lives/ featuring Mona Barrie aud Gilbert Roland, Lo^e has for the past year been -on the- Fox- writing staff and has assisted John Stone with Spanish productions,,/ IRKS BUFF : B Scrapping oi clearance and zoning features of the ihptlon picture code hits local exhibitor group hard. Buf^ falo last spring was one of the few centers to formulate a clearance and zbhlng schedule based 6n admis- sions; The- plan.^.was :rejected..;hy. the Code Authority and a legal rep- resentaitlve of the Code was sent here under whose direction a new plan was: formulated after pro- tracted meetings held all summer.' Announcement of .the abandoh- meht of the ^ zoning features in favor of individual complaints, to the zoning board is being regarded Washington, Dec. 24. - The leasing clause abandonmeht^ suggested "by the Gbde Authority. / precipitated a rath.er sharp tilt at the hearing Wednesday (19) on pro- posed changes, in the NRA film code. Deletion of the leasing clause was strongly recommehded by Tyree DiIlard,.code authority counsel, but was opposed by Ed Kuykendall,; M.P.T.p.A. president, and Norman SamuelBon, of New York, attorney for 'y^^illlam C. Smalley, Hamilton, Nv, -Y.V exhibitor enmeshed in a code violation dispute growing out of this particular provision. Admitting that codist^ were di- vided. 6 to 4^ oh the deletion pro- posal; DiUard specified several rea- sons why the provision should, be dropped.. The clause, is 'relatively unIinportant.':he testified, noting that only 15 of l,<j89 complalhts brought before the C.A. and subsidiary boards involved this section and that no complaints have been, filed. against : chains; Difficulty of en- forcement, conflict of state laws, and possible damage to landlords were other reasons cited why the CA, desires to/throw this provision overboard. With the explanation that the provision prlglnally was intended to^ protect indies against unfair chain competition, iDlllard signiflcantly stated that ail of the complaints brought under tiiia section, during/ the past year were aihied at in- dependents..: Consequently, Dillard concluded, there is little'reason for contlnulhg such an unworkable pro- visions Eiuykendall and Samuelson con- tended In -defense of the provision that the simple fact of its existence undoubtedly had exercised a ben- eficial effect and had deterred com* petitors from trying to Induce land- wlth dissatisfaction by local exhlbs. many of whom iare threatening to withhold iturther payments, or as- sessments. They contend that the clearance and zoning was the only advantage guaranteed exhibitors under the code and that Its aban- donment now takes away this sole advantage. One local group is on record as favoring complete aban- donment of the code so far as the exhibition end Is concerned. lords to cancel leases of their rivhis. But the two defenders could not agree on how the clause should be revised to make it enforceable. Insisting that the small number of cqmpla.lnts is evidence of the value/ of the clafise, Samiieison suggested that legal difficulties encountered in administration nilght /be avoided If the provision, were aniended to ex- clude cases involving foreclosures, estates, and bankruptcies. Dillard previously hkd related the dlfflcnlty encountered in smoothing out com- liam H. Moore, Jr,,/supported the sale order as wholly, legitimate, ad- tantagepus to all creditors who had come into bankruptcy court with claims,' and/as c'omjpTyrrig'ih eviery respect, equitably as well as tech nicaliy, with the : bankruptcy act They claim, for the trustees, that . the handling of the F-WC b^hk rupt estate, from a condition where the opemting ; lo.Bses _were |25,000 per weeici when tiiey took the reins, to a: profitable status enabling dis charge of the claims In full, was the most remarkable stewardship of a,ny big bankrupt In the history of sho-w business. ; Truitees' Affluments Attorneys for the trustees con tended that the protestants were amply coyered for recovery of any Judgment - by the indeninlflcatlbn clauses attached to the purchase bid, and by the specific assumption by the purchaser of legitimate ad^ ministration charges, Into which ad- mittedly the type of lltfeatloh In volved would fall. Arguments were finally submitted on briefs addressed, mainly to the Issues: Is the proposed sale; as ord.ored by; Referee Moss with full aipiprpval of all unsecured creditors, a permissible distributioh. of assets Under the bankruptcy act; does' a sale ias here proposed depend upon cash payments, and may the bank ruptcy be terminated while lUlga- /tlon involving the trustees is pend ing in other legal forums T Combined briefs contained over /lOQ pages of argument and citations tiO be scrutinized by the court In ftfflrmlng or/revoking .the isale. • Jurisdiction of the film Code Au thorlty and the NRA compliance board over Interferehce-wUh-lease complaint^ filed by William C. Smalley of Haniilton, :N. Tv, was challenged last week by Wlllard McKay, attorhey for Schlne circuit . Bringing question of constitu- tionality of code prohibition on lease ihterferehce, up to the Blue Eagle for. the/ first time, McKa.y contended that the government agency has ho authority; to rule on the Smalley complaint and insisted that proceedings be abandoned. Re servihg decision, compliance board proceeded to/hear arguments on the merits of the action without preju dic e to -M< ^K rt irr s le gal, c on te n tl pn r »th Sides Absent When Jolson . There/ are. reports 0^. a Rosalbie settlement in the suit which has been brought by Al Jolsba against Herbert J.. Yates and ether, bflacers and directors of Setay. Ine^ Invest- ment trust. Neither side showed up to'argue the nootlon for an examlnia-: ;tl6n~before trial. of-Tatas and other Finding Is expected some time this week. UA Sales Confab m S.F. : San Frahclsco,/Deo. 24,: Midwinter western sales con yentlon by United Artists is set for here starting Jan, 2. All branch managers and .sales men from the western division will participate, Al Llchtman, presldihg, RitfMT Quits Z-C Boaird : Los Angeles, Deo. 24. William /O.. Rlter, branch man ager here. for. Columbia Plctureis, has resigned as a .member of the L. A. lonlhg and clearance board. '■Successor is expected to be Al OlKeefOk Universal braneh man ager'/■.. /': defendants wtien duo to be heard in New York Supreme court Dea 17, Mqflph /therefore was stricken off the court cailendar.: : ,/ Albert J. Karch, holder of 400 Setay shares, is co-pialntlff with Jolson in the suit. Jolson is a holder of 2,200 shares, Accordlhg to thecemplalnts, Setay under the domination of ifates, lost millions, through allegedly specula- tive managcmeht The InveBtment. trust was .organized in April, 1927, and, according to the complaJnt, started in business with |14i06o,000 In oash and morketatnie securities. The working capital of Setay, it is alleged, was actually paid and re- ceived from the public which pur- chased the cipltaj stbciL , Jolson and Karch -seek ah acr counting and restitution of such al- leged wasted funds, and ' secret prpflta, advantages and emoluments which directors are claimed by plaintiffs to have brought about, BOETTINGER'S DUTIES On Speciiit Morals Commltiae East To 0.0. All Pix Ohe of the first functions worked out for John Boettlhger, new Will H avs' appointee. Is that of serving on the special committee, which is called In to look at pictures in the east which offer morally controver- sial questions. Committee is called in,after Tinceht Hart, eastern prpr ductlon code ndmlrilstrator re- viewer, has looked at them. Hart, under Breen In the self- censorship setup, looks, at all pic- tures produced In the. east: or In Europe: for release here. . When moral questions come up on which a final decision is desired, the spe- cial committee. Is called In. . In addition to Boettlnger, the group Includies Arthur DeBra, Les- ter Thompson and Maurice McKen- zIe. Bpettlnger Joined: the M;P,P.p.A.: a week ago with the title of an as- sistant to Hays but without duties otherwise. defined. Presumption Is that since he. has a strong Wash- ington background BocIaUy and with the'Chicago Tribune's bureau In the Capital, he wilt function also a,i a contact with Washington. plaints where several sets of bond or mortgage holders or estates. Were Involved. ;.. • /.|^mbarrau!ng^r;_ Admitting that/the clause In its: existing form Is not entirely effec- tive and places the Code Authority in an embarrassing position, Kuy- kendiall advised that attempts be made to- improve the phraseology before tossing the provision in the: ashcan. The efCect^ of the clause , has been 'good even if we have been unkbie to enforce, it,' he iaald. The provision \6crves as protec- tloii for Indies against fly-by-nlght promoters who have been trying to chisel in on theatre properties In ; small communities, so., Jf. t. u. a. prexy asserted.. Noting that many; small ezhlbs have , had a difficult Job weathering the depression and are jUst how beginning to see day- light, he said that if no provision of this sort .Were contained in the code there would be no restrlctlbh on racketeering whl^h. /would force numbers of Indies anil small hptise operators into barikruptcyi / . :; 'There Is no question this has been restrictive Influence on the fly-by-' night prompters,' Kuykendall said; 'I feel sure that/85% of the exlilbl- tprs want 6ipmethi,ng,^vP^ this sort to restrict u'nfalr pperatlohs.': " Strength qf Allied ' States was thrown behlHa kuylceu'lall and Sam- uolsoh when Deputy Administrator WJlllam P. :Farnsworth read and censored/ a letter from Abram: F. Myers. Complaining that 'domi- nant' /majors want to delete the clause how- that it has served its (Continued on page 27) •