Big Bankrupt

Big Bankrupt

Paramount Publix Corp. with $166,000,000 in assets and 1,500 theatres on its hands, took a step that cinema financiers had been advocating for a long time when it went into equity receivership six weeks ago (TIME, Feb. 6). Last week Paramount, still a pathfinder for the industry of which it was once kingpin, took another downward step, into voluntary bankruptcy. The reason was clear. A group of Paramount bondholders, dissatisfied with Adolph Zukor and Charles D. Hilles, the amazingly contrasting pair of receivers appointed by the court, had secured an order calling on them to show reason why they should not be removed. Bankruptcy nullified the order. It obviated further "nuisance suits" against the prostrate company over which as many as 150 lawyers, each trying to secure maximum advantages for individual creditors, were hovering like vultures last week.

Whether Paramount's equity receivers would continue to run the company as trustees in bankruptcy was only one of the questions raised by last week's move. Another was whether the new bankruptcy bill, permitting bankrupts to compose or compromise debts, would be extended to corporations in time to apply to Paramount-Publix. The only thing that appeared to be fairly certain was that the receivership bankruptcy would not, for the time being at least, interfere with the manufacture and distribution of Paramount films. Paramount-Publix is the holding company which owns the stock in subsidiaries which make, distribute and exhibit Paramount pictures. The parent company admitted liabilities of only $41,000,000 against its assets last week. Attorney for the receivers protested that the company was bankrupt, not ''in the sense of possessing assets worth less than its liabilities" but only in not being able to liquidate. Aging Adolph ("Pop") Zukor was appointed with aristocratic Corporation Counsel Hilles as receiver because he started Paramount in 1916, used it to dominate the cinema industry from 1917 to 1929 and still knows more than anyone else about its workings.

In Hollywood last week, the salary cut troubles which last fortnight caused all studios to close for a day (TIME, March 20) had been temporarily adjusted. In their place, the exhibition branch of the industry met trouble. Refusal of three unions--musicians, stagehands, operators --to take a 25% cut caused all Cleveland cinemansions to close last week, threatened similar closings in Indianapolis. Kansas City.

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