Variety (Dec 1938)

VA&BSTY WtihktedKff December 7« 1938 Loew-Metro Execs- 31% (Continued from page 1) preme Court before Justice Louis A. Valente. The other sessions were taken up with the reading of d^osi- tions taken in Hollywood last sum- mer of ^ieveraj of the defendants. Reiss testified that in 1934 the six defendants actually got more than the stockholders... For that year the profits of the corporation amounted to $8,646,000, of which the defend- ants s6l i$Ij?79,000 and the common stockholders $1,096,944. Detail Profits For Years 1935-7 • In 1935, out of profits of, $7,626,000, the six "received $2^,133,000 and stock- holders $3,316,737; 1936, $10,583,000 profits, of whielx $2,819,000 went to the defendants and' $3,353,000 to stockholders. Profits for 1937 amounted to $14,333,000, of which $6,288,000 was split by the sextet and the stockholders received $13,- 444,000, which had to be made up in part by the reserve funds of the corporation. In answer, "to these figures, coun- sel for the defendants expounded that the defendants were 'worth all they icceived' because ft was due 'en- tirely to their efforts, ability and genius' that the .profits of the cor- poration were so enormous. Heiss, over the continued protests of former Judge Joseph N. Proskauer.l for . the defendants, went into great detail concerning the finances of the corporation during the past four- years. The witness testified that the average dividends on preferred stock was $880,000. This amount was not deducted from the 20% bonuses paid to the six favored officials. Emil K. Ellis is attorney lor the plaintiffs. It was also brought out that Rubin, as cbimsel, received an additional $1,000 a week salary for advising Metro, besides the same amount as counsel lOr Loew's. This was voted, him in 1927 and is continuing to the present- Loew*s Lost $1,406,507 In 13 Ohio Theatres The first hint of mismanagement ehar£ed by the plaintiffs came out when it was'testified that Loew's lost $1,406,507 invested in 13 Ohio thea tres. ^lis loss was.deducted from the stockholders. The trial is expected to continue at least two -weeks longer. Up until yes- terday (Tuesday) the l>earings were taken up .by the reading of deposl - tions ttlken last sununer on the Coast. These included those of Mayer, Bern ^tein,.Ilubin and Isidor Frey, attorne' for the corporation since 1919. After the latter'i testimoiv7 was put into the reedrd, the first witness for the plaintiffs was the accountant. Practkally. the entite day (Mon day) 'wa;$ occupied by'Introduction of about 36 exhibits relating to con- ttact?, options and other matters bC' tween corporation. find " defendants during past 11 years. Late in the afternoon EUis read into the record parts of L. .B. Mayer's - deposition iii which the latter testified that he rarely rejad contracts gi,ven him to sign by Rubin. Mayer's deposition also described a dispute he had with Thalberg when Thalberg threatened to quit Metro unless he secured' more . money* According to Mayer's de- position» Schenck.took part in con- troversy and accused- Thalberg of tryluig to 'ruin the firm', Thalberg, May^er declared, ^ve Schenck 'a ter- fibte tongue lashLag'. Latter threat- ' etjed to- sue. Finally the matter was submitted to the board and stock op- iions were the' result, Mayer Tells About Trio's Stock Optionis Thalberg and Schenck, at an im- passe, Mayer testified. Mayer stated t^at under. the new. contract he, Thalberg and Rubin were given certain options to pur- chase stock in. the. company.. The revisions, he said, were brought sibout following a meeting on the ^oast between Nicholas M Schenck* president, Thalberg and himself. It was a stormy, session,,^ the testimony reveals, with Tlialberg insisting oh the revisions under - threat < of re- signing' from.. the company and re- tiring from the heavy load of pro-, duction responsibilities which he carried at that time. Schenck declared he^ was not in any personal position to promise any revision of the contract,- that as liresident of the. .concern ]^e-had certain le^ai ' bbjig^tions be, was obli$ed to m&intaJn, and ,the .mee^. in^' ended with the two' principals. Later various officers and friends sought to heal the breach between Thalberg and Schenck, including the letter's brother, Joseph M. Schenck. Finally a new agreement, satisfac- tory to Thalberg, was drafted by Edwin L. Loeb, and contained the stock purchase clauses. Mayer testified further to the fact that on Oct. 26, 1983, the contract was amended as to' a definition of specific duties for Thalberg, who was to give personal supervision over a small group of productions instead of over general studio activi- ies.' This led, Mayer stated in his deposition, to differences between' iims'elf and Thalberg over adminis- i rative matters. These disputes sub- sequently were compromised under an'agreement that, in case they ever reached an impasse, final decision in aily dispute would be left with Nicholas M. Schenck, The.depositions are being read off by Emil K. . Ellis, chief counsel for he plaintiffs' putting the interrogo- ioils, while former Justice Pros- cauer, head of defense counsel, from the witness stand reads the answers. The second deposition placed in record was that of Rubin, vice presi- dent, 'director and general counsel of Loew's. The only executive defendants present, at:the:trial, thus far have befen Nick Schenck and Dave Bern- ; itein. kubin Testifies He Was Satisfied Rubin's testimony on the Coast in- dicated he was |Q>yays perfectly sat- isfied with his connection with the corporation and had never "thought- of leaving it, as had the late Irving Thalberg', who had' threatened' to quii because taxes were eating up he income he was receiving. Thal- berg's squawk resulted in a new contract and bonus of 100,000 shares of stock and a lucrative agreement involving $900,000 for the benefit of his wife, rJorma Shearer, to make a certain munber of pictures, which it- is claimed she never did. Miss Shearer, iaccording to Proskauer earlier in the» trial, threatened to qiiit and go with Paramount unless she or . her husband's estate, which she subsequently inherited obtained k hew arrangement. llubin lield about 5,000 sl\ares of stock valued at $100,000. When the question of stock options eame up among the defendant officers, Rubin consented to Thalberg receiving the bonus of 100,000 shares because he, Rubin, 'realized Thalberg's value to the. company.' When Thalberjg died, Rubin's, deposition said, the Rubin- Meyer-Thalberg closed combination automatically dissolved. Anotl^er deposition read into the record was tiiat of Nick Schenck, president of Loew's, who said that Mayer considered Thalberg 'one of the best young men in the business and would develop tremendously.' Schenck said that Thalberg always seemed to be dissatisfied with the income he was getting. ^chenck Wants To Know About Money Thalberg continually expressed amazement at the attitude of the others when he demanded more money. Schenck said at one time he asked Thalberg, 'What in hell do you do with all your money?* At the time Thalberg was receiving salary and bonuses amounting to over $400,000 annually, Schenqk said that he holds about 5,000 shares of Loew stock and up to the time he testified had not exercised his option to pick up 48,000 set aside for him from the Thalberg estate. Bernstein's deposition followed that of Schenck's. He is another vice-president, treasurer arid direc- tor. He said that Schenck had told him that proper results were not be- ing obtained on the Coast and Schenck attributed this fact to Tiial- berg's dissatisfaction. The condition was settled by the removal of Thal- berg from.complete charge, of pro- duction, giving him only special •films to supervise, with Mayer tak- ing direct charge. At this time Thal- berg was very ill. It was at this time, 1932, that Thalberg was grant- ed the optionp on 100,000 shares to be picked up over.a $ix-year period. Judg^ Friey's deposition wiis the last one to be read and contained little of interest. The plaintiff's ac- countant w^s then placed on the stand;" 'Actors Don't M By BILL HALLIGAN The lowing herd winds «IowIy o'er the lea. To feed the likes of guys like you and me. The crack about actors never eat- ing probably emanated from the brain of some , nitwit author who couldn't.'beat the gate at the re- hearsal hall to spoil his own play. Most of them think that Chateau- briand is a cottage in Flanders. As a matter of fact actors have done more to make chop houses fa- mous than any other group of men know. Don't want to put myself away as a trencherman but you can bet all ;he plush-drops'in Cain's storehouse i hat I didn't get these five stomachs passing slugs in the automat When I say actors, I mean all of show business; that is, all except the chorus queen. Wheft, Her Rqyal :iighness of the ensemble has to pay for her own fodder she picks a -stool in the corner drug store and goes for a ptomaine sundae. Later that same evening at the Stork club the chop better not be- a bit underdone or she will blow the roof off. That's when Mr. John is going for the checkeroo, of course. However, this ale has nothing to do with the la- dies of the ensemble. It's a piece' about actors who deserted the 'fabu- lous invalid- when he had two strikes on him and opened up their own little bistro with George Rector's cookbook in one hand and a prayer in the other. Been ^n all the shebeens from Ban- gor to Bellingham, so show' me a hot grocery store where the actors hang out and you've got the best eating place in town. Gallagher's on 52d street has the SRO sign up' every night and Ed Gallagher's ex-missus can take all the bows on that one. When, vaude- ville ?ent for the oxygen tent three White Rats from the three-a-day put their hard-earned dough into a spot called the Steuben Tavern and to- day there is one on every corner that Nedick overlooked. Morton Downey, is. interested In 'Ike's' chophouse on East 48th, and doing nicely, thank you. . Jimmy Dwyer's Sawdust. Trail, two doors down from The Lambs, is run by a former straightman, and Hamburger Mary's got its name from a gal who could croon an Irish lullaby with the best of them. Wouldn't say that Frank Case was an actor but anytime he wants to quit the Algonquin for the mike I know where a sponsor is waiting. Get his new book, 'Tales of a Way- ward Inn,' by the way—it's a liter- ary 'Hellzapoppln.' Outside of Bridgeport on the Bos- ton Post Road the' two-a-day turn of Piker and Douglas have -an oat- meal oasis that is turning them away, and our old pal Capt.' Francis Patrick Irving O'Hay is doing all right with a. -chili caravansary in Taos, New Mex. And }n Hollywood .Hollywood's two new crack eat- eries are owned and operated by Dax^ Chasen, the protege of Joe Cook, the skillet wizard, and Bob Murphy, whose specialty is Iriish turkey—the good old C.B. and C. The famous Brown Derby chain was started by Gloria Swanson's ex- helpmate with a little financial aid from Wilson Mizner, Carl' Harbaugh and Winnie Sheehan, all members of the Masquers Club in good standing. Sammy Lewis is the coin behind Maxie! Rosenbloom's cinematic night- erie, and the first real spot in the moving picture colony, Henry's, was opened by a lad named Henry Berg- man, Charlie Chaplin's straightman. I even know an opera singer who opened a delicatessen store—from 'Salome' to salami in one season. (Wait for the laugh.) 'Val Harris runs a bodega in Los Angeles and Lester Allen was once the landed proprietor of a Japanese tearoom. The late Billy La Hiff, Nancy Carroll's uncle, financed many a flop along the Great Trite Way with the dough he garnered from hungry Lambs and Friars at his Tavern, still a 48th street landmark to his genius, now sired by Two-Ton Toots Shor. Thirty years ago Brown's Chop Ho6se, on Broadway next to the Empire theatre, was a famous theatrical hangout.. .The only one I ever knew that was strict ly stags. The College Inn, Chicago, got its fame from show business, and we"'ll give you one guess what made Reuben's and Lindy's. The mugg who coined the phrase 'actors don't eat' must have been thinking about himself. lliallierg-Shearer Terms An amendment to the complaint in the action of certain stock- holders against Loew's, Inc., and some of its executives was filed Monday (5) by Emil JK. Ellis, attorney for the plaintiffs. The amend- ment reads: 'That on or about the 14th day of July, 1937, defendant Loew's, Inc., entered into a contract with defendants Edwin J. Loeb, Bank of America National Trust & Savings Association and Norma Shearer Thalberg, as co-executors and co-trustees under the Last Will and Testament of Irving G. Thalberg, deceased, which purported to com- promise and settle a claim asserted by the said estate .against de- ~ fendant corporation and the defendants Mayer and Rubin .indiyid- ually, and/or as partners pursuant to which contract defendant cor- poration has paid or credited to the said Estate and will credit and pay for a period of time ending on Dec. 31, 1938, sums in excess of $900,000. Simultaneously with, the execution o^ the said contract, defendant Loew's, Inc., entered into a contract with defendant !Norma Shearer Thalberg, purporting to employ her as an artist to appear in six nlotion picture productions for defendant corporation. at $150,000 per picture, payable whether or not such pictures are actually produced by defendant corporation. 'Upon information and belief, the payments made under the said contract between defendant corporation and the said Estate ,of. Irving G. Thalberg, deceased, were made without any consideration to the defendant corporation 'whatsoever and in settlement of .claims as- serted by the said estate against the individual defendants Mayer and Rubin, and/or said payments were made in order to obtain and in consideration of the rendition of services by the. defendant Norma Shearer Thalberg for the defendant corporation > under the said -con- tract With her. The said contract with the estate of Irving G. Thal- berg also resulted in an increase of the percentage of the profits of defendant corporation then being paid to defendant Mayer, to-wit, from 7.3% to 10.6% (out of 20% then being paid to the. partnership of Rubin, Mayer and Thalberg) from the period commencing Aug.* 31, 1936, to Dec 31, 1938. 'Plaintiffs beg leave to refer to the said contracts for other pro- vision thereof, but herein specifically allege that the provisions made for the payment of a percentage of the net profit of defendant cor- poration to the Estate of Irving G. Thalberg and the payment of a percentage of the.net profit derived from the distribution of motion pictiures more than half completed prior to Dec. 31, 1938, as well as other pirovisions thereof, were improvident, improper, unlawful, and a waste and spoliation of the assets of the defendant corporation.' S. Claus Lane Makes H wood a Fake Fairyland to Lefty-ln Many Ways By Joe Laurie, Jr, Hollywood, Dec. 6. Dear Joe: ^ Well, here we are still in Fake Fairyland, where the hot sun melts th« Christmas tree candles on the paper mache trees .and the radio gag men make their prayers to 'Jensen's Encyclopedia of Wit and HjUmor.' Tlie town looks like an electric chair with scenery. They got Santa Claus driving up Hollywood Boulevard every night, in a big sleigh. Aggie sez they'll have the poor old guy all tired out by Christmas. The policemen an4 firemen are making a drive for 40,000 used toys and I hear that one Holly« wood Lothario donated three blondes and two brunets. It's a strange town with strange ways. People who have never been in pictures or radio wear dark glasses even at night. When you take a walk, you feel like you're going to a circus. A contract is your calling card. In the Brown Derby they have booths and when a gang sits down to exercise their stomachs and tonsils and they see a guy coming towards them that they figure don't belong, they, give it the 'spread formation' which makes no room for the gxiy. Of course if he happens to be a right guy then they huddle close and make room for him near the check. There are plenty of right £uys here and smart guys, too. They can fix up the picture and radio business in a week if they would let them. All you gotta do is to listen to them for a few minutes and you-know they'd put the country on the 77b routine in a week. Hollywood and "Vine is where you meet the old troupers. They punch the bag and cut up touches about the old days; the days that are here, and the • days that are to come. You can't .stick a trouper's hope in storage. They're looking forward now to Television, they figure that's the thing that's gonna furnish their ticket back east or get them a swim- min pool out here. They got Television now where it only can reach SO miles; the jumps will be small anyway. The Old Nifties You hear a lot of gags around, but they haven't topped the old ones like when Lew Brown saw a well known actor buying sbme stuff in a store and said, 'Don't buy anything you can't put on the Chief.' And the classic that Al Boasberg pulled about pictures: 'A picture is previewed out' here and everybody raves about it—studio officials,- press and public. Then they put it In a can and ship it back to New York. And when it opens there it turns out to he a cluckero picture; it seems that some- thing happens to it on the. train going east.'. The other night Frisco asked a bunch of boys how they liked a picture that he was in. And they said, 'It's okay, Joe, but you were in the back- ground, you should have insisted on some closeups of yourself.' 'Oh, no closeups for me,' stuttered Joe, 'I'm on the lam.' And the time when Frisco told "Viollnsky that he was through acting at Warner Bros.; that they w«re gonna hire him as a gag man. And "Violinsky said, 'They can't make two mistakes.' And so you see the syn hasn't dried out their sense of humor. . Junior has been dragging mle, and Aggie around all the stores picking out all the toys he wants. They really got some swell stores 'here and I gotta write myself a 10-^minute routine for Christmas to explain to the kid why tbe. stuff he picked out wasn't delivered. I gotta stick in town here for another week at lea^t because. I'm looking for second-hand equipment for my radio station—but it's hard .to get.. You^d imagine with the stuff they're using on the, radio it would wear out the equipment in no time. "Vic and Florence whom I left in charge at Coolacres write me that things are okay; - they're getting a consistent output of reliable bad pictures. Give our best regards to the boys and girls back there and tell '^"^ *y buy stockings a few sizes larger—you know Christmas is .coming. -SEZ Your Pal, , , Lefty. P. S.—Louie Cohen sez, 'Every dreani has its alarm clock.'