Variety (Feb 1936)

Wednesday' February 5, 1936 PICt a RE s VARIETY 5 Fedl Authorities in D. C. State New U.S. Suit in St. L WiD Be Rushed Wiashlngton, Feb. 4. Speedy action to bring a new equity stilt ag&lnst Paramount; Warner Bros^, and RKO In the St. Loula antl-trust situation Is planned ■ the government following dls- inlssaf^ of the original Injunction case last week by Federal Judge Joseph W. Molyneaux, iponslderably Irked by repeated adverse rulings and red-faced over faulty preparation; Justice Depart-^ ment ofHclals vigorously denied. the ' dismissal was designed as a. grace- ful out and insisted the equity case will be. pressed to the finish re- gardless of the unsuccessful crim- inal proceedings. Feds do not tidpate any great delay in. resum- ing the injunction efCbrts. As announced in St; Louis, rear son for abandoning the equity case was m order to Join various other officials of the. three principal dis- tributors, as well as the affiliated ftdmpanles, as co-defendants -since Juflge Molyneaux declined to accept testimony' about company execs Who were not specifically brought into the case as co-diefendants. New case will be more explicit, in order to plug .loopholiBs through which de- fendant comipanies -and. Indiyiduals Were trying to escape the restrain- ing order sought by the govern- ment. Although disgruntled by succes- sion of adverse' rulings, Fieds do not contemplate any effort to obtain another judge for the. new proceed- ing, J. spokesnian said. Judge Molyneaux was considered fair and conscientious, and government men admitted faulty preparation of orig- inal c&se° left' him no alternative .but to rule against the prosecution on numerous technical points. Special Assistant Russell Hardy will, continue ais chief prosecutor for the government, although additional attorneys from Washington may.^ be ordered to St. Louis to bolster "the federal staff. Over 40 Co-Defendants St. Louis, Feb. 4. More than 40 film execs, agents, et al., as well as WB, Par, RKO and affiliated companies are expected to be named In the new suit to be filed by Department of Justice which will continue its flght to force the .three major producing companies to supply pictures to Ambassador, Missouri and NeW Grand Central theatres, F&M- owned and operr^ed, here. •• Although It was ■ a hallow one, government won a victory Wednes- day (29) when U. S. Judge Joseph W. Molyneaux of Minneapolis, sit- ting in equity case in which govt sought injunction against WB, Par, RKO and subsidiaries, to restralii them., from' continuing to refuse to supply films to the three houses, permitted Russell Hardy, G-man, to. dismiss case without prejudice. Court's, action, over strenuous ob- jections of all defense, counsel, opened gateway for government to refile suit and Hardy Indicated that if and when action is reinstated It will be liere, because affected prop- erties aire located, in St. Louis. In asldrig^ court to permit to dls- rniss, without prejudice. Hardy told Judge Miolyneaux that In view of Judge's rulings against admissabil- ity of various matters of evidence Which government considered im- portant to Its case, which virtually wrecked Department of Justice cast., he decided to bring a new suit naming As defendants, In addition to corporations 'the principal actors Ih the drama,' meaning some of the execs of corporations. Hardy Indignantly spurned offer of Frederick H. Wood, chluf of WB array of counsel, for government to amend petition to bring in Individ- uajs as defendants and that defense would guarantee appearance of any '■one named by Hardy, with asser- tion that this would not meet the situation. Wood asked the Court to exercise discretion by overruling government motion, in fairness to dofcn.sc bc- (Continued on page 62) Ginsberg to RKO? Hollywood, Feb. . Httiry' Ginsberg,, who resigned as v.- p. and g, m. of Hal Roach, Inc., is negotiating with RKO to take over the spot vacated through • the death Of. Herman. Zohbel.- Dave Loew May hdie Produce, Leaving Roach Hollywood, Feb., 4. David Loew today (Tuesday) tendered , his resignation as Execu- tive v.p. of the Hal Roach;company, and goes out on his own. ' His deal with Roach is a temporary one, givr ing him the privilege of canceling up to April 1. If electing to stay, his contract was for three years. Loew is not certain of how to move. He left the theatre depart- ment Of Loew's, Inc., In New Ttork, to join Roach because he wants to gO Into production. But the Roach connection wasn't as he figured.. His idea is to engage writers and screen names and build up, whereas Roach Insists on doing without big salary handouts. Also, Roach insists on a more or less one-man rule, With Loew -mostly faierely' sitting by, Loew. will remain here and announce his future plans shortly. There Is a chance that Loew may Join UP .with .iHenry Ginsberg In ^ broduction venture of his own al- though the latter also has an RKO deal ph. Ginsberg was a Roach exec until recently,' and has been a long- time friend of both Loew boys. He re^ierhed over Dave Loew.'s protest. He is not, however, regarded, as a producer by Loew, but rather as a- business man, and Loew wants to hook up with an experienced pro- ducer if he moves in that direction. Hal Roach has appointed Matt O'Brien, assistant secretary and treasurer, studio vmanager to suc- ceed 'Henry Ginsberg, v.p; and gen- eral manager, who-washes up on contract terminated' by agreement. His ticket had another year to.ryn. Joe'RIvklh will be in charge Of talent, directors and writers, while Lawrence Tarver, former casting director, will become production aide tp Roach; L. A. French, for- mer studio manager, will be general production manager of the Laurel and Hardy unit. HERCZEG POINTS YARN FOR SHEEHAN PROD. Hollywood, Feb. 4. Geza Herczeg, author of 'Wonder- bar,' is doing a yarn, for W. R. Shee- haii. Herczeg, who came her6 from, the east with the producer, will have yarn ready when Sheehan effects production afflllatidn. Suit Holds Kent West Hollywood, Feb. 4. ■Sidney R, Kent will remain here for some time. Twentieth-Fox head sticks around until the Tally-FoxrWest "Coast suit is settled. JOE KENNEDY SOUTH Joseph P. Kennedy, who wound up his assignn^ent Ih figuring out a recapitalization setup for Radio Corp. of America, wjth its adoption by directors laat Friday (31) left for Florida for a two-month vaca- tion almost immediately after de- tails had been perfected. PBOTEST TO m Otterson Casting Around for Production Manpower— L u b i t s c h Has Several Other Offers—^Roth'acker, Bagnall and H^zbrun—f Unit Production Idea Possihility of Par Regaining % Ownership^ontrol oMts Theaters; Blank and H-O'D Deals NEW HEAD? Hollywood,. Feb. 4. John E. OttersPn ^iasting around' among iojE) producera .here- abouts to"flnd a bead f Or the Para- .mpunt studio. The leak .came after. Ernst Liibitsch protested to Otter-, son oyer various reports that Wat- tierson Rothacker wonid assuihe full charge. According to Lubltsch's contract, Rothacker has control of executive administration, but is not to participate in actual production matters. Lubitsch has had offers from other studios and It is regardeid as unllkeljr that he would' accept de- niotion In the Par organization. Since his arrival on the Coast a few weeks ago, Otterson has been hand- ing more duties to George B^tgnall, studio treasurer, some of which for- merly cleared through Henry'Herz- brun. Otterson has been concentrating on a change In studio tops, also try^ ing to protect the studio,, against possible exodus of producers .whose contracts expire within the~ next six months. These producers have been offered new deals beyond their pres- ent agreements. ^ A four-picture contract On a unit idea was reported offered W. • R. Sheehan, .and Otterson Is also re- ported trying to get Sheehan Into the Par studio production toi> spot. Both of these, reports are denied by Sheehan personally^ Sheehan Is also reported as pos- sibly prpduclng for Warners. Plan originally outlined by Otter- son for institution of unit system of production In the . Coast studiOs, -.is rapidly being put into operation. Method places iresponsibllity for quality of product, costs and mainr tenance of schedules. In the laps of' the associate prpducers, and is de- signed to relieve pressure on front office execs. Otterson has had several huddles during the past week with Ed Weisl, counsel for Paramount and personal attorney -for Floyd. Odium of Atlas. Prexy. explained .a.dvantages, of the unit method of production to Weisl, besides giving him insight into stu- dio, problems and delays in getting pictures into work during the re- arranged setup of operation. Weisl and Odium are • slated to leave, for New York within the next few days. Otterspn remains here for another two weeks. Gordon Back at Metro Hpllywbpd, Feb. 4. Max Gordon reported to Metro, oh return from New York, where he'll be advisor on story buys, and musicals for thei Sam Katz unit. He had similar berth at studio last year. SCHDLBERG'S 8 FOR 2fl-F«X, OWN UNIT Holly\vopd, When B. P. Schulberg joins 20tli Century-Fox On expiration of his Columbia contract May 1, according to reports, he will haVe his own pro- ducing unit to turn out around eight pix this season. Understood that Edward Arnold, under personal con- tract to. the producer, and . Ralph A. Kohn, V.p. of B.. P. Schulberg, Ltd., also swing to 20th-Fox.. Schulberg joined Columbia as i^nlt jproducer a year ago on agreement that glyes' him part of profits on his pic. kohn went with him, but pUlled but of the setup In November^ 'SHOVE OFF' REPLACES 'CHEER' AS MG TUNER Hollywood, Feb. 4. 'Shove Off,' an unproduced mu- sical by Sid Silvers, Jack McGowan and Ruc^dy DeSylva will be made at Metro in lieu of 'As Thousands Cheer.' Slivers, McGowan and Cole Porter, -wlio. were.-scripting-.'Cheer', jire do- ing til e new story. Lewis with Zeidman Hollywood, Feb.^4.. B. F- Zeidman has sighed Harold Lewis as his production manager. Lewis swings over from a similar post with Reliance. FEIST HOT-SFBINGING Hollywood, Feb, 4. Felix Feist, Metro sales chief, left yesterday (Monday) for Hot Springs, Ark., to undergo treatment for arthritis. At Least 3 Plans in Roxy, N. Reorg; WB,l&M. HiR Among Interested Several plans for reorganization of the Roxy theatre, N. Y., may be presented for consideration to the bondholders' committee today (Wednesday). Therei is no telling how many plahs may be submitted for the coinmittee's consideration-r- at least three seem certain. Some months past Howard Cull- man, present trustee of the theatre, was mentioned in connection with a probable reprganlzation plan, Pn^hls own b'ehsnt with some associates. Currently, Fanchon & Marco, Har- ing & Blunienthal and Warner Bros, are mentioned as possibly submit- ting reorganization plans. Any reorganization plan which may be offered is likely to suggest definite film hookups and while Warner Bros, is obvious in th's wise, thei-p is curloaity as to what pbsslble film company hookups Fanchon & Marco may hskve, or Haring & Blumenthai. Whatever private capital may be back of the F. & M. is not known, although it may be the same finan- cial support which backed Fanchon St Marco in St. Louis. Also some of the capital may be coming through certain film company sources' indi- rectly If not. otherwise. Any plan which may 1)6 submitted would call for a cash outlav of fi i>ni $300,000 to $1,000,000. There is a strong possibility that Paramount may -ish to regain 100% p^ynershap-control of its sev- eral chains of theatres ih the United States. The refusal of Par's board of directors to approve the renewal of the existing partnership theatre arrangements in some of the terri- tories would support this Wall Street opinion. Par's board has been deliberating fpr many months without a deflnite ^decision on A..H. Blank partnership in approxi- mately 30 middle-west theatres and on the Karl Hpblitzelle-Bob O'Don- riell partnership "in around. 80-100 Texas theatres. Instead, Par's board has elected to arrangie to extend for an addi- tional. 60 days Paramount's right to repurchase full control of tljese the- atre's, "Thus Par's, option to buy back 100% control of. .the Texas cir- cuit, including Interstate, runs, now, until April 4 next. Par's option to repurchase full ownership control of the theatres operated by Blank now runs until April 1 next. ■There are members of the Par board who are opposed dPflnitely to perpetuating existing partnership theatre jarrangPhiients. Certain . of the board members feel that it would serve the company's interests best by limiting fleld operating units to management arrangemehts plus a reasoAable' participation In the profits of an operation. These board members favor-Par's rpgaining full ownership contirol of its theatres. Otterson's Proposal * On the other hand, It is had that John E. Otterson, company presi- dent, favors renewing , the existing theatre partnership and that ha recommprtded to the board that these partnership theatre deals be extended." Trndw-Efuclrcircumstances the company might fPrfeit Its repur- chase rights or have its repurchase! rights altered greatly. The com- pany management also Is held to have urged the board to continue the existing partnerships^ Otterson, it is had, ma^e his recommendations-ln' a 28-page nierri- orandum which he read • to the board, at a meeting. This refusal of the board toaccede to the recommendations of the com- pany's presidPnt, may be unusual. It i.s probably without parallel in the Industry. At'first the board was inclined to take Otterson's views and those of the management in this regard, but the directors reversed themselves at a later mooting. This reversal fol- lowed complaints which were re- ceived br' directors from certain New England holders of 5>ar selcuri- tles. These Par security holders urged the directors hot to renew the existing partnPrshlp; arrangements and, it is understood, threatened suit; if existing parthefships were extended. ism There seems to bP a split of the board on the question, with the di- rectors as a body hesitating to take deflnite action on the matter. On the Texas houses Par has the right to repurchase these (exclusive of Interstate> by paying the Hob- iitz;elle-0'Donnell Interests approxi- mately $350,000, or the partnership earnings for the fit at 11 months of the partnership. Par also lias the right of electing to buy or sell the Intnrstate part of the "fexas group, at a price to bP fixed by Iloblltzelle. The Texas groUp petted close to .$l,000,00u profit In 1035 with Par.^s Its half, getting upwards of $400,000. A pre.yi'ius e.stimate that it might tiiko .nround $-',^00,000 or upwards for I'ai' ti) r'ogain full .control of the TexaK s:i'oup. \yn<^ Information which jr i... i,fli(ni'<i, had been given the )iii;ir(l (Hit niit?lit have been a theo- I't-riciI coMcliislon.