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S. District Court August 1, an offer by a West Coast combine to acquire the debt-ridden Chicago recording company was withdrawn and the court ordered receiver Gerald W. Grace to liquidate the company.
The acquisition offer was withdrawn because Vee-Jay’s obligation to the U. S. Government were considered excessive, Billboard has learned.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)
