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GOLDLAWR, INC. v. SHUBERT

September 20, 1968

Goldlawr, Inc., Plaintiff
v.
Jacob J. Shubert , et al, Defendants


Kraft, District Judge.


The opinion of the court was delivered by: KRAFT

KRAFT, District Judge.

 In this private antitrust action, involving booking and presentation of legitimate theatre attractions, after a lengthy trial to the Court upon the issues framed by our final pre-trial order and after careful consideration of the oral and documentary evidence, the stipulations, requests for findings of fact, conclusions of law and supporting memoranda of counsel, we find the following:

 I. Historical Background of the Parties and the Litigation

 A. The Plaintiff

 1. The plaintiff, Goldlawr, Inc., was incorporated on August 31, 1950 under the laws of Pennsylvania.

 2. Following its incorporation, Goldlawr, on September 19, 1950 issued 500 shares of its capital stock to William Goldman and 500 shares to Lawrence. Each paid $250 in cash and gave a personal note for $2,250. On the same day Goldman was elected President and Lawrence Vice-President and General Manager, which positions they held until June 25, 1956.

 In June 1956 Lawrence transferred his 500 shares of Goldlawr stock to Goldman, making Goldman the only stockholder of Goldlawr. The sole consideration for this transfer was the assumption by Goldman of Lawrence's obligation upon his $2,250 note to Goldlawr. Lawrence and his nominees resigned as officers and directors of Goldlawr and were promptly replaced by nominees of Goldman who have served continuously since that date.

 3. Goldman's entire cash investment in the stock of Goldlawr in the period September 1, 1950 to October 17, 1960 was $250. No payments on account of either promissory note have ever been made to Goldlawr.

 4. By its charter Goldlawr was authorized to engage in a general theatrical business involving booking and presentation of legitimate attractions and the exhibition of motion pictures.

 5. Goldlawr leased the Erlanger Theatre from the First Pennsylvania Company for Banking and Trusts from September 19, 1950 (as of September 1, 1950) until December 2, 1953; from November 24, 1954 through January 1, 1955; from October 1, 1955 to September 30, 1970.

 6. Having retained counsel for that purpose, on or about June 15, 1956, Goldman caused Goldlawr to commence the present action claiming treble damages, injunctive relief and attorneys' fees for alleged violations of the antitrust laws for the period September 1, 1950 to October 17, 1960. Civil Action No. 21506 was begun on October 17, 1956; Civil Action No. 22092 was begun on February 18, 1957.

 B. The Defendants and Co-Conspirators

 7. The present defendants are:

 
(a) The executors of the estate of Jacob J. Shubert, deceased, who died December 26, 1963.
 
(b) The executors of the estate of John Shubert, deceased, who died November 17, 1962.
 
(c) The executors of the estate of Lawrence Shubert Lawrence, Sr., deceased, who died April 15, 1965.
 
(d) Select Theatres Corporation, a New York corporation, incorporated April 5, 1933.
 
(e) Modern Theatre Corporation, a wholly-owned subsidiary of Select.
 
(f) Barrymore Theatre Corporation, a wholly-owned subsidiary of Select.

 8. The individuals and corporations, not defendants herein, who are claimed by the plaintiff to have engaged with the defendants in the conduct of which the plaintiff has complained are:

 
(a) The late Lee Shubert, who died December 25, 1953
 
(b) The late Marcus Heiman, who died September 9, 1957
 
(c) Milton Shubert
 
(d) United Booking Office, Inc.

 9. Lee Shubert and Jacob J. Shubert were brothers. John Shubert was the son of Jacob J., a nephew of Lee and a cousin of Lawrence Shubert Lawrence, Sr. and of Milton Shubert. Lawrence, Sr. and Milton were brothers, nephews of Lee and JJ and cousins of John.

 11. After Lee's death, JJ continued the partnership business, individually and as the surviving partner, and took over sole and complete control of the business, which included approximately 75 closely held corporations owning theatres and other assets. He had final authority over bookings in Shubert-operated theatres in New York City.

 12. Lee and JJ owned or controlled all of the preferred stock and a very substantial majority of the common stock of STC, which was incorporated in New York in 1933. Through STC and its numerous subsidiaries, Lee and JJ conducted their theatrical business enterprises.

 13. John Shubert was the president and secretary of nearly all the Shubert-owned companies and until his death was very active in the Shubert theatrical business.

 14. Lawrence Shubert Lawrence, Sr. was general manager of the Shubert-operated theatres in Philadelphia, Pa. and was an incorporator and, until June 1956, 50% shareholder of the plaintiff corporation.

 15. (a) UBO was incorporated on June 9, 1932, as a result of the merger of the Shubert and Erlanger interests. A. L. Erlanger, who died in 1930, was succeeded by his nephew L. A. Bergman, who was associated with Marcus Heiman, a part-owner of the Erlanger Booking office.

 (b) One half of UBO's stock was owned by STC and the other half by Marcus Heiman until his death.

 (c) UBO was engaged in the business of booking legitimate theatrical attractions in theatres throughout the United States outside New York City.

 (d) From 1933 to December 25, 1953 Lee Shubert was an officer and director; from 1933 to September 9, 1957 Marcus Heiman was an officer and director; from 1933 to 1958 J. J. Shubert was an officer and director.

 (e) A certificate of dissolution of UBO was filed with the New York Department of State on March 27, 1958.

 16. Through LAB Amusement Co., Marcus Heiman operated the following theatres: Biltmore in Los Angeles; Erlanger in Chicago; Colonial in Boston; Ford's in Baltimore; and Nixon in Pittsburgh (until 1950). On June 20, 1952 LAB transferred its interest to Heiman. Heiman had an interest in the National, Washington, and a 25 per cent interest in the Walnut, Philadelphia.

 17. Milton Shubert operated the Shubert Theatre in Washington during a portion of the period 1950-1960.

 C. Abbreviations and Definitions

 18. The following abbreviations, where used, identify the following persons or corporations

 JJ - Jacob J. Shubert

 Lee - Lee Shubert

 John - John Shubert

 LSL - Lawrence Shubert Lawrence

 WG - William Goldman

 STC - Select Theatres Corporation

 SOC - Select Operating Corporation

 MTC - Modern Theatre Corporation

 BTC - Barrymore Theatre Corporation

 UBO - United Booking Office

 IBO - Independent Booking Office

 MH - Marcus Heiman

 LAB - LAB Amusement Corporation

 ATS - American Theatre Society, Inc.

 TG - Theatre Guild, Inc.

 NYC - New York City.

 20. The following terms are used herein with the following meanings:

 
(a) "suit period" means 1933 to October 17, 1960.
 
(b) "damage period" means the period from September 1, 1950 (the day after plaintiff's incorporation) until October 17, 1960.
 
(c) "government case" refers to United States of America v. Lee Shubert, et al., Civil Action No. 56-72, Southern District of New York, commenced on February 21, 1950.
 
(d) Shubert(s)-refers to Jacob J. Shubert, individually and as surviving partner of the firm of Lee and J. J. Shubert and the corporations owned by Lee and J. J. Shubert; Lee Shubert during his lifetime; John Shubert; Lawrence Shubert Lawrence; Select Theatres Corp. (including its subsidiaries, Modern Theatre Corp., Barrymore Theatre Corp. and other subsidiaries). Except as otherwise noted, the term refers also to the foregoing acting in concert together with Marcus Heiman; LAB Amusement Corporation and other corporations controlled by Heiman and United Booking Office.

 21. The legitimate theatre business consists of production, *fn1" booking and presentation.

 It is generally, but not always, true that production involves acquisition of the script, employment of the star, cast and other personnel, rehearsals, booking the attraction in a try-out city or cities, in New York City, and the road-show cities.

 22. Booking involves the negotiation of arrangements, (generally, though not always, through a booking office,) between producers and theatre operators for the presentation of legitimate attractions in theatres, including contracts fixing playing dates and financial terms.

 23. Presentation generally involves the operation of a theatre or theatres in which legitimate attractions are ...


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