“I’d rather laugh with the sinners, Than cry with the saints; The sinners are much more fun, You know that only the good die young”Billy Joel, Only The Good Die Young, 1978.
On Saturday December 9th, 1978, Creed Taylor Inc. was listed in the New York Times financial section as applying for Chapter-11 bankruptcy protection. There, right above the involuntary bankruptcy of a fruit seller, was one of the most innovative jazz music producers of the prior 20-years.
It must have been an incredible blow for Creed at the time, someone who had undergone a relatively meteoric rise in the music business, in little over 20-years, from doing staff productions at ABC Paramount, to “saving jazz” in the early 1970’s.
Chapter XI Petition Filed for an Arrangement By:
CREED TAYLOR INC., 1 Rockefeller Plaza. NY. CTI is in the production and sale of phonograph records and tapes. It is 50 percent owned by Creed Taylor and Marion Wendes Taylor. Three Brothers Music Inc. and Char‐Liz Music Inc. have voting stock. Liabilities, $2,283,377; assets, $1,397,208. It is signed by Creed Taylor, chairman of the board.New York Times – December 9th, 1978.
There in black and white, then in one of the most widely read print publications, Creed and his wife, are listed as the owners. At that point in 1978, the financial problems had been an open secret. People, musicians, and bills were not getting paid. CTI were involved in multiple concurrent lawsuits, and if nothing else the legal bills were piling up.
What is Chapter 11?
A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy. A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. That’s what Creed did on December 8th, 1978, he filed the forms with the United States District Court, Southern District of New York with a voluntary petition.
In simple terms, it’s way for companies in trouble to save themselves, keeping the profitable parts of their business while doing away with loss makers. It often also allows companies to get out of unprofitable contracts and debts. The company’s management remains in control of the business, but a bankruptcy court oversees the process as it negotiates with landlords, suppliers and other creditors.
I’m not a forensic accountant, or a bankruptcy specialist, but I have a folder full of PDF’s related to the CTI Bankruptcy, it will take time, and careful review. It would be interesting to know who lost out, how much and why? For now, I have a lot more interesting things to look into, but I’ll get back here at some point.
What is also interesting, not for Creed, I’m sure, is that many of the legal cases CTI/Creed Taylor would be involved in, many are cited still as modern legal precedence. Sea Wind Vs. CTI for example for both contract and copyright law.
Creed Taylor Inc.
It’s commonly believed that CTI was started in 1967. From a regulatory standpoint, that’s not true. The company, CREED TAYLOR, INC. was filed with and approved in New York on October 26th, 1966. The company would finally be wound up, annulled, on January 25th, 2012.
But in June 1967, after dabbling with the name TAYCO, and the Tayco Sound, it was announced that Creed Taylor, Inc. had signed a long term, exclusive contract with and be distributed by A&M. Record World announced that the new imprint would carry both the A&M logo and “Taylor’s new “Taco Sound” design.”
By September 1967, CTI and/or the press were walking back the TAYCO name.
Taylor Under CTI, Not TaycoCASH BOX – September 30, 1967 – P20
NEW YORK—Producer Creed Taylor has announced that all Creed Taylor Inc. product which apears [sic] on A&M Records will be issued under the CTI logo, not, as was previously announced, under the Tayco logo.
What Went Wrong?
As discussed elsewhere on this site, in 1969, Taylor’s “long term deal” with A&M was up, and he went on to run Creed Taylor, Inc. entirely separately. Success though breeds envy, competition and waste. The June 17th, 1978 issue of Record World contained the following
CTI Fires Seven; Reorganization Due
By MARC KIRKEBY
NEW YORK – CTI Records, beset by lawsuits and financial woes, dismissed seven employees in an apparent economy move on Friday, June 2. An announcement of the reorganization plans of the Creed Taylor founded jazz label is expected late this week.
Jerry Wagner, president of CTI, denied last week that the company had closed its doors or would do so in the near future. “We’re here, we’re open, we’ve got product in the stores,” he said.
Wagner added that CTI had talked with several companies about possible distribution deals for the label’s product, but that no agreement had been made. CTI has been reported to be in financial difficulty in recent months, due largely to production and pressing costs on its albums.
The legal battle between CTI and Motown Records, now in its third year, goes on. Motown, which once distributed CTI product, received distribution rights to certain CTI releases in
a 1976 out -of -court settlement of that pact, and litigation over rights to new CTI records has gone on ever since. Both CTI and Motown have been sued by Grover Washington, Jr. over those same rights, and that suit is still pending as well.
All three albums in CTI’s most recent release, by Idiris Muhammad, Nina Simone and Yusef Lateef, are represented on the RW jazz LP Chart, despite reports that CTI’s indebtedness to Columbia Record Productions had limited the numbers of those albums pressed.Record World – June 17th, 1978 P3/12
You don’t want to fight a war on two fronts at once, in 1978, back against the wall, facing multiple lawsuits, CTI and Creed Taylor, filed for Chapter 11 bankruptcy to give them time to reorganize. CTI would go on to fight another day, win some, lose some.
Broke isn’t forever, perhaps only the good die young?
GRT, CTI, Capricorn Go BrokeCASH BOX – December 29th, 1979 – P88
Included among the other major business realignments in 1979 were the bankruptcies of GRT, the custom tape manufacturers and distributors and owners of Janus Records; CTI Records, the independently distributed jazz label owned by Creed Taylor; and Capricorn Records, the Macon, Ga.-based Polygram – distributed label owned by Phil Walden that
had launched the Allman Brothers to national success in the early ’70s.
Creed Taylor was 91-years old this year.
Footnote. If you’ve read this far, and are inclined to do your own research, here are a few points.
- The records of this case are no longer in the Federal Courts PACER system.
- Archives of bankruptcy cases: The National Archives and Records Administration (NARA), Central Plains Region facility, serves as the storage facility for the majority of the court’s closed case files. General bankruptcy case files are retained by the court for 15 years. Currently, most of the 1970-1995 bankruptcy case files have been destroyed. To find out if the case files are available costs $64+$39, and it’s not worth asking 😉
- Case number: 10 B.R. 265, 267-68 (Bankr. S.D.N.Y. 1981)
Chapter 11 – Bankruptcy Basics [via uscourts.gov]
PACER [via uscourts.gov]
UPDATE: 12/09/20 09:31 added footnote, more information and corrected minor typos.
12/09/20 9:46 added case number following email request