From the MCRFB NEWS archive: 1966
CHICAGO — An unidentified West Coast combine is bidding for debt-ridden Vee-Jay Records, a bankruptcy hearing in U. S. District Court here revealed
last week.
The group’s attorney said the purchase is contingent upon whether or not 69 Four Seasons’ masters would be included in the acquired assets. The Seasons formerly recorded for Vee-Jay.
The masters in question were awarded to Vee-Jay in a settlement when the singing group was signed by Philips records. Under terms of that agreement. the masters were to go to Mercury Record Corp. in the event that Vee-Jay, even then on shaky ground financially, went bankrupt.
An attorney representing Four Seasons’ agents, Barneget Enterprises, declared in court here last week that the masters must revert to Mercury. The issue of who gets the Four Seasons’ masters will be decided by the court referee in a hearing May 17. If the ruling grants the masters to Mercury-Philips, the West Coast combine will drop its purchase bid. If the ruling favors sale of the masters to Mercury-Philips, the West Coast combine will drop its purchase bid. If the ruling favors sale of the masters to the Vee -Jay buyers, the combine will pick up Vee-Jay’s $1.8 million debt with a promise to pay creditors a dime on every dollar.
A separate arrangement will be made, in the event of a Vee-Jay sale, with regard to taxes owed the government.
NOT BANKRUPT
At the moment Vee-Jay is not technically bankrupt. The company is under chapter II of bankruptcy law, still seeking a financial arrangement under a petition filed here in January.
At that time Vee-Jay president James Bracken said, “The proceedings were instituted with the expectation that the corporation could be reorganized on a sound financial basis. . . “
If in the May 17 hearing the Four Seasons’ masters go to Mercury and the purchase offer is withdrawn, the court will order receiver Gerald W. Grace of Chicago to take steps to liquidate Vee-Jay.
Meanwhile, Vee-Jay has suspended all operations and all employees have been released. Telephone callers discover that Vee-Jay’s telephone has been disconnected.
Formed in Chicago, in 1953, Vee-Jay moved to Los Angeles in 1964 to be closer to its management team. The company was hot at the time, with the Beatles under contract. The company fell into financial difficulty, lost the Beatles, and moved back to Chicago last fall.
At its return to Chicago, Vee-Jay had 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 under contract.
Butler’s contract with Vee-Jay expires May 31, and he has been signed by Mercury.
One of the group seeking to buy Vee-Jay is reportedly Betty Chiapetta, former Vee-Jay controller. Identities of other parties in the combine are being withheld, but it is believed that some well -known industry figures are involved. END
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(Information and news source: Billboard; May 14, 1966)
