From the MCRFB NEWS archive: 1966
CURTAIN DOWN ON VEE-JAY AS LIQUIDATION IS ORDERED
CHICAGO — Vee-Jay Records, which scaled the sales heights before losing the Beatles in 1964, plunged into formal bankruptcy here last week.
In a hearing in U. S. District Court August 1, an offer by a West Coast combine to acquire the debt-ridden Chicago recording company was withdrawn and the court ordered receiver Gerald W. Grace to liquidate the company.
The acquisition offer was withdrawn because Vee-Jay’s obligation to the U. S. Government were considered excessive, Billboard has learned.
Vee-Jay has been in Chapter 11 status since early this year when President James Bracken announced that the firm had filed a petition for financial arrangement.
“The proceedings were instituted with the expectation that the corporation could be reorganized on a sound financial basis,” Bracken said.
In a hearing in May, a group represented by attorney William Bluestein of Los Angeles announced interest in acquiring Vee-Jay, which then owed the government about $1.5 million and had nearly $2 million in outstanding debts.
Bluestein’s group was interested in acquiring 69 4 Seasons masters, which were bid for at the same hearing by counsel for the 4 Seasons group. Bluestein’s interests would have made a financial arrangement with the government and would have paid creditors a dime on the dollar or 1/10th of 100 percent owed to each creditor.
The 4 Seasons contract with Vee-Jay Records reportedly called for the masters to revert to their agents, Genious, Inc., in the event of company bankruptcy. The masters will undoubtedly find their way into the catalog of Philips Records, a Mercury Records affiliate, also based in Chicago. The masters in question were awarded to Vee-Jay in a settlement following the signing of the group by Philips.
Vee-Jay suspended all operations here in May. The company was founded in Chicago in 1953, moved to Los Angeles in 1964 and returned last year. When the label returned to Chicago, the company had such artists as Jerry Butler, Betty Everett, Jimmy Reed, Little Richard, John Lee Hooker, the Dells, Joe Paige, Russ Morgan, Harry (Sweets) Edison, Fred Hughes, Joe Simon, Orville Couch and several gospel acts. END
___
(Information and news source: Billboard; August 13, 1966)
What ultimately brought down Vee-Jay was just partly influenced by the wrangling over the Beatles. a lawsuit from Bob Crewe’s Genius, Inc. for back royalties owed the Four Seasons, alleged financial mismanagement by label president Ewart Abner, Jr. [bringing about his termination], artist defections once their contracts were up to Abner’s new Constellation label [Gene Chandler and Dee Clark for example], new label president Randall (Randy) Wood’s California branch office, expense accounts and his over-expansion into other music genres… all of these contributed to the decline and fall of what was America’s first and probably greatest major black-owned record label.
Vee-Jay was on the cusp of the soul revolution when they succumbed, and Motown was all too happy to enjoy its well-earned success.
Don’t forget, Joe Simon, the Dells, Jerry Butler, Betty Everett and others were still charting for Vee-Jay while the label was struggling… “Stay in My Corner” first appeared on Vee-Jay before being re-recorded [in a longer version] for Chess. Same for “Oh What A Nite”.
Little Richard made his comeback on Vee-Jay in 1964. Billy Preston got his real start on the label. Barrett Strong did some writing and production that was released on Vee-Jay as well as releasing his on single on their Tollie subsidiary before becoming one of the powerhouse writers at Motown.
It’s nice to romanticize that it was all about the Beatles, but Vee-Jay was an influential R&B label long before and for a good time after the Beatles were nothing more than an acquired lease deal from EMI’s Transglobal Music that just ‘happened’ to be the group who redefined rock and roll music.
In late 1963, who knew? Remember, the first “Beattles” release on Vee-Jay tanked in late 1963!
So, it’s only right to know the full back-story. BSN publications has a wonderful write-up online if anyone cares to Google “The Vee-Jay Story” and read the whole thing… freom 1953 through 1966.
Thank you Mr. Levine for sharing your comments regarding the Vee-Jay Records story you touched upon on our website. Thank you also for your suggestion we should to pursue further into the Vee-Jay story, found on the web. We found the link and we’re placing it here on MCRFB as well.
MCRFB thanks you Jeff for the heads up. We appreciate and welcome comments, always.
http://www.bsnpubs.com/veejay/veejaystory1.html
My father (Jerry Smith) was the former vice president of Vee Jay records.