Boxoffice-March.10.1951

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Sale of Divested Theatres Brings a Detroit Suit DETROIT—Palling boxoffice receipts are the background for Involved litigation over operation of three major neighborhood theatres filed in Wayne county circuit court here. Involved on one side are United Detroit Theatres and Earl Hudson, XJDT president, local Paramount operating affiliate, and on the other Goldhar-Zimner Theatres, Inc., including Jack Goldhar, former eastern divisional salesmanager for United Artists, and his son-in-law, Ben Zimner, former film salesman, and their respective wives. A charge of "misrepresentation" highlighted the proceedings. The case involves disposition of over $500,000 in leases. TWO SUITS AKE STARTED Two suits have been started—one as a law case, by UDT, based upon alleged nonperformance part of the agreement effective May 24, 1950, by which GZ took over the Regent, Annex and Alger from UDT, and seeking recovery of $125,000 as damages. The other, filed as a chancery case by GZ, sought: 1. Cancellation of the agreements, notes, assignments, and bill of sale which effected the transfer last May. 2. Return of $25,000 down payment and "other damages . . they have suffered . in the premises." 3. That UDT be required to assume GZ's contract with the L&L Concession Co. 4. Appointment of a receiver for the theatres. 5. A restraining order against UDT from further prosecuting its original lawsuit, taking any other action to enforce or cancel the notes and agreements outstanding, and from negotiating or encumbering the stock certificates of Goldhar-Zimner Theatres. First round "in the court Friday may be considered a draw, with UDT losing a motion for rep)ossession or re-acquisition, and GZ losing one for a receivership. The cases will presumably go through the usual lengthy legal process for adjudication. GZ TRIES TO RESCIND DEAL An attempt to rescind the whole deal was made by counsel Ellman and Ellman for GZ on January 24, with an offer to turn over the keys to the theatres, but was turned down on behalf of UDT by Rockwell T. Gust, who has appeared in numerous major industry legal battles, including the historic SIMPP case in federal court. A proposal to negotiate or submit to arbitration was made by Ellman and Ellman for GZ, with the comment that "Judicial considerations of this controversy affecting three theatres which have been and remain In a most precarious condition may delay resolution of fundamental dlffereijces for many months . . . The Interruption In the operation of the theatres or possible mismanagement by a receiver, the damage to the reputations of the theatres and perhaps to the parties can make any ultimate courtroom victory pyrrhlc." This was not accepted, and the filing of suit and countersvit followed. The record in the case disclosed that the Goldhars and Zimmers each own 25 per cent of stock in the company, and stresses their inexperience in exhibition, except for Goldhar's experience in Toronto 28 years ago. The "warm and friendly" relationship hitherto existing between Hudson and Goldhar is emphasized, detailing Goldhar's "trust and confidence" and "respect for (Hudson's) knowledge and experience," as important factors in the negotiations that led to the agreements. Details of the leases assumed by GZ from UDT, as recorded, are: Regent, 1,400 seats, leased from Regent Theatre Co. for ten years, ending Dec. 31, 1955; Mrs. Ida Klatt, widow of a pioneer exhibitor, appeared as president of the company in the accompanying documents; rental $1,500 per month. Alger, 1,182 seats, leased from Saul and Hattie Sloan of the Mercury and Radio City theatres, Nov. 1, 1945, to July 14, 1963; rental $1,820.83 monthly until July 14, 1950, and $1,987.50 thereafter, plus an unspecified annual percentage of gross receipts in excess of $170,000. Annex, 1,496 seats, leased from Riviera- Annex Theatre Co., from March 15, 1933, to Dec. 15, 1954, at $30,000 per year, plus a percentage of net yearly profits. THE CHARGES AGAINST UDT The case acquires significance as the net result of the single largest divorcement procedure in this city, with UDT disposing during the past year of its first run Broadway- Capitol and United Artists theatres, in addition to the trio in this suit. GZ charges that UDT "falsely represented that (it) was required to dispose of the Regent, Alger and Annex theatres to comply with the antitrust decree," and "that these were then the only theatres which could be disposed of in the Detroit area." It is charged that UDT would sell only in a block, and that, because of past friendship, indicated they would give Goldhar a chance "upon terms much more favorable" than offered others. It is charged that UDT declined to show its books on the operation of the theatres involved, because Paramount considered them confidential, but that it was represented that the Alger was earning $35,000 per year net income after taxes; the Regent $15,000; and the Annex $5,000, and that it was represented GZ "would be readily able to meet all current expenses of ojjeration out of current receipts from the three theatres" and in addition "... readily able to pay the principal and interest on the obligations they were required to assume." Following signing of the agreements, it is charged, GZ found that revenue of the theatres was greatly less than they had been led to believe—from May 25 to Dec. 31, income before taxes at the Alger was given as $5,000: Regent, loss of over $2,500; Annex, loss of over *25,000—a total loss of $22,500 or over for six months, compared to the claimed represented profit of $55,000 after taxes—with Income of the one profitable house, the Alger, taken before taxes. pi^^ûrgh variety Tent 'Adopts' a Nursery PITTSBURGH—Variety Tent 1 of Pittsburgh, which for years has adopted an orphan child each year and selected the foster parents, has "adopted" a whole foundling home. Last week, the original chapter of the showmen's philanthropic organization disclosed plans to erect a $250,000 nursery building for the Roselia Foundling Home and Maternity hospital as a memorial to Mrs. Eleanor Harris, mother of John H. Harris, founder of the Variety Club. In addition. Tent 1 announced an annual $12,000 grant for establishing a protective adoption placement program at the home. The twin Variety projects are aimed at making Roselia one of the finest adoption placement agencies in the country. An architect already is drawing the blueprints for a circular three-story structure on property next to the Cliff street location of Roselia. Named to a committee to supervise the projects were Tom Troy, George Eby, Peter Dana, I. Elmer Ecker and John D. Walsh with Ben Steerman chairman. Pincus Quits Intermountain; To Join Blumenfeld Chain SALT LAKE CITY—Charles M. Pincus, manager of the Centre Theatre, an Intermountain Theatres first run house in downtown Salt Lake, resigned Thursday (8) to accept a position with Blumenfeld circuit in the East Bay region near San Francisco. Pincus will leave Salt Lake in two weeks to take over his new job. No successor has been announced as yet by Intermountain. Pincus has been a Salt Lake showman since 1933, with the exception of two years in San Francisco. He has gained nationwide attention for exploitation and showmanship on world premieres, children's shows and other events. He has managed the Utah and Centre theatres during years spent in Salt Lake. He was featured on the cover of BOX- OFFICE nearly two years ago, when he told of the value of his children's shows and how to run them properly. Court Allows 20th-Fox New April 1 Deadline NEW YORK—Twentieth Century-Fox has been granted an extension to April 1 for filing its plan for divorcement. Since that day falls on a Sunday, the due date will be the following day. The Department of Justice had approved the company's request for an extension and the New York statutory court granted it Monday (5), the date previously set for filing. Both the company and the Department of Justice told the court that agreement on a consent decree is near. The court also approved an extension to April 1 for final dissolution of 20th-Fox interest in Golden State Theatres, which had been set for March 15. The annual stockholders meeting has been scheduled for May 15. At that time a vote will be taken on the terras of the consent decree. 14 BOXOFFICE March 10. 1951
ITS 34.928.741 READERS THE w im EXCITIN mî ###### r^m- World Premiere IN Fort Worth MARCH 23rd BIGasTEXAS MP ' W ' ^"^ «NTURY-FOX UH^¥\M^
Page 1 and 2: Errol Flynn and Dean Stockwcll in a
Page 3 and 4: UP! "THE GREAT CARUSO" One BIG M-G-
Page 5 and 6: l(bur Next Demonstration of the Pow
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Page 11 and 12: I I I I I Independents Confident Of
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Page 15: ...Easter , * . The PARAMOUNTS VERY
Page 19 and 20: Hughes, Government File Stock Brief
Page 21 and 22: IRES PRODUCED BY REPUBLIC! THAT [7O
Page 23 and 24: National Theatres Executives Discus
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Page 29 and 30: British Economic Crisis Expected to
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BOXOFFICE BAROMETER • EXHIBITOR H
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attendance. Played Sat., Sun.—C.
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++VerY Good; + Good- ±Fair; -Poor
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I CLOSING DATE: Monday noon pracadi
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Boxoffice-March.10.1951

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