Al saw a burly employee across the way and called for help. As he came toward his boss, it was a drama within the greater drama, a stillness at the core of the mayhem, a rescue making its way through the crowd and the chaos. Al, clutching the chain-link fence, arms akimbo, needed help, and help was coming. “He came all the way around and came right on through these guards,” says Al, “and he got me and carried me back out around.” The stillness—not a calm, but a tense, floating quietude—continued as the two moved toward the gate in the fence, all eyes looking: “As I walked out of that gate onto College Street,” Al says, “I heard myself say, ‘Whew.’ I felt relief. It was off of me. I still had the other things to deal with, lawsuits and many other things, but all of those pressures associated with keeping Stax open were off of me.”
The building was determined to be clear of personnel. The back door was shut. A padlock would be put on the security fence. Stax—the exuberant spirit, the wanton waste, the divine mission, the tumultuous life force, the deep soul, the music, the music!—had ended.
27. “I’ll Take You There”
Epilogue
Memphis has torn down more history than most other cities even have, a longtime Beale Street merchant named Abram Schwab used to say. A tour of Memphis is an excursion to empty lots and vacant buildings, an outing to see what used to be. The tour guide’s refrain becomes, “Imagine on this weedy site . . .” Memphis despised its African-American culture, was ashamed of exactly what the world loved us for, dismissive of what made us unique. The business leaders and politicians who run this overgrown cotton crossroads so shuddered at being recognized for blues and soul that, somewhat methodically, they tore most of its history down.
The Memphis mentality is to blend with the crowd, to look like the reflection in the 1970s and 1980s mirrored buildings in Atlanta or Houston. Memphis prefers freshly laid plastic to anything historic and distinct. Beale Street was saved, but not before the body that supported Beale, the neighborhood around the street, was mowed down in the name of urban renewal. The rebuilt Beale disdained history, moving signage wantonly, “improving” what it wanted, imitating Bourbon Street’s liquor mall. The path where Dr. King marched has been largely erased. The first Piggly Wiggly, the first Holiday Inn—anything old in Memphis, including churches, gets swept away. Hide what we don’t like, then pretend it doesn’t exist.
The building stood neglected from 1976 until it was torn down in 1989. (Stax Museum of American Soul Music)
This oppressive environment squeezes freethinkers to the margins, creating an unintentional incubator. It provides opportunity for Jim Stewart, for Al Bell, for their unlikely union. Al, born with a vision far-seeing and wide, and a determination to explore its outer reaches; Jim, ever cautious but bighearted and ready for change, with great ears and a strong commercial sensibility. They united, created so much good, so much opportunity—especially for those who’d never had such opportunity. Each man gave careers, wealth, and new life to those around him, but each man also caused many of those gifts to be painfully retracted. Neither intentionally harmed anyone, but like distracted parents, they each, after achieving great benefit, wrought great destruction.
“One day you’re making records,” says Jim Stewart, then “you leave court and you find out you’re not.” Less than a month after the forcible eviction, Stax had its day in court. January 12, 1976—gloomy, windy, and gray. Federal bankruptcy judge William Leffler, siding with the creditors, ordered the building padlocked and the company to cease doing business. According to guards posted on-site, Jim sat in his car in the parking lot behind the old Capitol Theater, barred from entering the business he had founded. He looked at the building—fifteen years spent there, rented it for a hundred bucks a month, bought the block, sold it for millions; Jim had had it all. After about thirty minutes, he drove away.
“How can you say it grew too fast when you start at zero in terms of master tape value in l968 and by 1974 the company is valued at sixty-seven million dollars?” opines Al Bell, indignant nearly four decades after the fact. “Grow that fast for me if you will.”
The test of insolvency is whether liabilities exceed assets. There’s no doubt that Stax (and its affiliates) owed the bank in excess of $10 million and had many other debts. But much harder to calculate was the value of Stax’s assets. Stax was made up of three broad entities: the Stax Record Company/Stax Organization, which owned real estate, recording equipment, subsidiary labels, artist contracts, and master tapes; the publishing companies, primarily East/Memphis Music and Birdees Music, which owned a combined total of over three thousand copyrights, many of which were already classics receiving continued play by their original Stax artists and also covered by other artists; and then various investment offshoots, primarily tax shelters. The value of these shelters, along with Stax’s real estate, was easy enough to assess. The valuation problem was in the tapes and the copyrights. “Independent auditors look very, very askance at unusual types of securities,” explains the bank’s attorney Wynn Smith. “And masters are, to put it mildly, a very unusual type of security. I think the bank’s judgment was that the value that had been assigned to those assets was just ridiculous, totally unjustified.”
Stax filed a reorganization plan in bankruptcy court in June 1976, over the objections of Union Planters. “I see hope coming my way,” declared Al. “There is no doubt about it: Stax can be successful again.”
Jim Stewart, in that same period, said, “I am saying to you that the same assets are still within the company now, because it’s in the minds of the principals, and the creative people at Stax are still here. It’s here [indicating his head]. I’m not asking for credit. I’m just saying, ‘Don’t underrate Stax.’”
Bill Matthews, the bank’s chairman of the board, had other ideas: “I think Stax owes too much money to be viable. There doesn’t appear to be enough credibility in the marketplace for it to be the same business it was.” Then Matthews took a more solicitous tone. “For the good of the community, [Union Planters would] like to see the music industry prosper and do well in Memphis. But you can’t just say it, you have to have a way.” Matthews championed the bank’s idea of an album comprising vaulted Stax material that would be released in the memory of Dr. Martin Luther King. The album, continued the self-appointed record executive, could generate enough profits to give Stax working capital; he encouraged local African-American entrepreneurs to buy the bank’s interest in the firm and use the profits from the album for the record company’s further development.
Al Bell was undeterred by the legal lockdown. “Those who forcibly render on us involuntary bankruptcy can only attain liabilities such as empty buildings,” he said. “I hasten to caution the hunter to take care that he is not consumed by the prey he seeks to devour.”
The bluster on all sides continued until midsummer, when arguments about Stax’s viability were made before Judge Leffler in bankruptcy court. The bank argued that Stax’s total debt, by some estimates to be over $30 million, made it impossible for the company to recover, especially with their star artist now recording for another label. Stax brought witnesses to substantiate the value of their tapes, including a Motown consultant who estimated their worth at “$21 million not discounted” and also a competing record label owner who suggested a potential “between $4 million and $5 million in revenue for the first year, if Stax were allowed to re-open.” The judge ruled that although Stax was a “financial holocaust” with little hope of success, it could reopen if it posted a $500,000 indemnity bond or $500,000 in cash within one week to protect present creditors. Stax proved unable to present the necessary funds, and a week later, Judge Leffler declared Stax out of business, allowing the trustee for Stax’s creditors to begin selling off the pieces. The recording equipment netted $50,000 and was scattered among several studios in town. The office furniture was bought by an auction house. Pieces broke off and drifted away.
The publishing companies were sold in February 1977 to Al Bennett
—an Arkansas man who’d founded Liberty Records in 1955 and negotiated a variety of music industry deals; he gave the bank a cashier’s check for $250,000, with the promise to pay the balance of the $1.8 million sales price over the next five years. Billboard described Bennett as “elated.” In mid-March 1982, Bennett more than doubled his investment when he sold the Stax publishing catalogs to Rondor Publishing. In 2000, Rondor was sold for $400 million; East/Memphis was one of Rondor’s several gems, alongside songs by the Beach Boys, Tom Petty, Michael Jackson, Al Green, and others. The value of the copyrights was proving to be incalculable.
Stax’s catalog of master tapes was sold at auction, but not before both Union Planters and CBS tried to claim them. In the court case, according to the appeal ruling, “Union Planters averred that a primary purpose of CBS in its dealings in this case was to gain control of a substantial portion of the ‘soul music market’ and specifically to gain control, dominion and beneficial ownership of Stax for said purpose to the detriment of Stax and its creditors.” The court ruled that the tapes should be sold, and the trustee should disburse funds to the various suppliers, artists, and other creditors. At auction, Al Bennett, who’d bought the publishing, bid $3.7 million for the tapes, but lost to the $1.3 million bid by the NMC Company, a Los Angeles–based liquidation firm; Bennett proposed installment payments and the judge took cash on the barrelhead. Before 1977 was out, the catalog was sold to an intermediary, Elan Enterprises, who then sold it to Fantasy Records of Berkeley, California. Fantasy was home to Credence Clearwater Revival and was also purchasing catalogs, including jazz labels Prestige and Riverside.
In 1977, Fantasy hired Stax songwriter David Porter to revive Stax, with the intention of not only mining the unreleased material—Albert King’s The Pinch is a great album from that time, and the Bar-Kays “Holy Ghost” finally got a proper release—but also signing new talent. Despite a solid effort, the label closed after a year and a half. Porter has continued to produce and write songs, and he and Isaac resumed their friendship, like true friends do. The Hayes-Porter collaboration yielded some of the soul era’s most enduring hits. A successful businessman, Porter continues to work in music, developing artists and writing songs. Fantasy understood what the Stax catalog offered, and under the direction of Bill Belmont, it kept Stax in the marketplace, introducing the music to successive generations. In early 2005, Concord Records purchased Fantasy for $80 million and reactivated Stax as a recording entity, signing Isaac Hayes, Booker T. Jones, and other artists, in addition to continuing the profitable re-releasing of the classic catalog.
These prices substantiate the latent value of Stax. The music business is built on catalog sales: that is, the artists and songs that sell for decades. The Stax hits have proved timeless, the biggest kind of hits. The performances are honest all these years later; the songs still sing from the heart. That’s the sound of the master tapes and the publishing rights accruing value. Hits, however, can’t be predicted with any certainty, and so the valuation of the catalog and publishing company at the time of the label’s demise is not a scientific determination. Tim Whitsett notes that most of the East/Memphis catalog was recorded by Stax, so if Stax was not releasing records, the publishing company’s value would diminish quickly. Conversely, significant value was gained when Congress in 1976 extended the duration of copyright ownership.
There are, nonetheless, authoritative opinions that agree with Al’s overall position that the assets decidedly outweighed the liabilities. “If Stax Records had been properly assessed,” says CBS’s Logan Westbrooks, “they would not have been forced into bankruptcy. But at that time, it was rather difficult to anticipate the value of those master tapes. And even the publishing division, where you think in terms of five, ten, fifteen years ahead—it has proven to be unusually valuable, no question about that—but could you make that analysis at that particular time? It was most difficult.”
In the wake of Stax’s closing, Al Bell was sued by the Chase Manhattan Bank of New York and the Tri State Bank (an African-American-owned bank in Memphis), by an interior designer, and by a host of others to whom he owed money. The IRS filed a lien against him; Union Planters foreclosed on property he owned.
In July 1976, during the heat of summer, while Stax was in bankruptcy court, Al Bell’s biggest trial began: fourteen counts of conspiring to defraud the Union Planters National Bank of $18 million. “They did a marvelous job in putting together the evidence against me, some with forged signatures,” says Al. “If I hadn’t known me, and if I hadn’t known what had taken place, I would have thought I was guilty. Fortunately, James F. Neal, who was my defense counsel, exposed the conspiracy.” On the stand, a cohort of Harwell’s from the bank (and a former member of the Memphis band Sam the Sham and the Pharaohs—“Wooly Bully” to you) testified that Harwell had shown him how he “could sign Mr. Bell’s name as well as Mr. Bell could.” Further, Neal brought a witness who’d heard bank officials brag, using a racial slur, about “running those” blacks “and especially the chief” black “out of town.”
Al’s trial ran for three weeks, and the jury of eight men and four women (seven of whom were African-American) deliberated only seven hours and fifteen minutes. Bell was acquitted on all counts—guilty of nothing—and former banker Joe Harwell was found guilty of making false entries on a bank record and with misapplication of bank funds. Though Harwell’s attorney argued that his client was being made a scapegoat to help the bank explain heavy losses, Harwell confessed to signing Bell’s signature to loan guarantees, and to having Al sign others without his knowing what they were. Harwell then used the guarantees as collateral for loans not only to Stax but also, according to Harwell’s testimony, to fictitious borrowers whose fake accounts he created for his own use. He was sentenced to two and a half years in jail, in addition to the five years he was already serving.
Al had been through the wars, and was thirty-six years old. His detractors, some thought, had achieved their goal despite the court loss. “Al, in fourteen indictments, freed on all charges,” says Jesse Jackson. “But then you’ve got the bloodstains on your clothes. Don’t forget that Dr. King led the Montgomery bus boycott in ’55 and was indicted for income evasion in 1957. The case was designed to slow Dr. King down. Dr. King was taken to the penitentiary about traffic tickets in 1960 and put in a cell with killers. That was a form of breaking people, designed to maim and to slow down and injure, and they did just that. Al Bell was and is a man of integrity.”
After a respite, Al returned to the record business. He became president of Motown Records in the late 1980s, its last days as an independent label, and assisted Berry Gordy in the label’s sale to MCA Records. He founded a new label, Bellmark, that discovered and distributed the song “Whoomp! (There It Is)” by Tag Team; it was certified quadruple platinum for sales over four million. He also worked with Prince, distributing his 1994 hit “The Most Beautiful Girl in the World” and coproducing with him the Mavis Staples album Time Waits for No One (which also included contributions from Lester Snell and Homer Banks). Recently, he’s returned to Memphis as chairman of the Memphis Music Foundation, and also launched an online venture, AlBellPresents.com. In 2011, he received the Grammy Trustees Award, the music industry’s highest honor for a nonperformer.
It would be another two years after Stax’s close before the story ended for Johnny Baylor. In October 1976, Baylor won a judgment against the IRS charging that they had improperly seized his money at the airport; a New York federal court ordered the IRS to return over half a million dollars to him, plus an additional $35,000 in interest. Before Baylor received his returned money, the trustee for the Stax bankruptcy put a claim on it to help satisfy the Stax debts, calling the payments to Baylor “fraudulent conveyances” that were intended to keep the money beyond the reach of any Stax creditors.
Baylor stood trial in October 1978, and Al took the stand, saying, “The management of Stax and Baylor had an understanding. It was a handshake deal.” The U
nion Planters attorney, Wynn Smith, was having none of that, and he set out to prove that Baylor was hiding the money for later retrieval. “You don’t earn two and a half million dollars doing nothing,” Smith reflects. “There was no documentation whatsoever to justify any such payments. There’s no evidence that he ever distributed any product. There wasn’t any basis at all for these payments. I argued to the jury that the whole purpose of this scheme with Johnny Baylor was to take two and a half million dollars out of Stax, free and clear of the huge amount of money that Stax owed.” Smith told the jury, “Al Bell had a laundry service named Johnny Baylor. Johnny Baylor was a bag man for Mr. Bell, but the bag man got caught with bag in hand.”
Baylor, forty-five years old, exhibited no fear on the stand, claiming that the money he received was, in fact, not as much as it should have been. He’d been promised by Bell, he claimed, royalties on all the records he produced, plus a fee for promoting and marketing Stax records. Baylor said he was actually owed about $5 million. “The deal Mr. Bell gave me I would have given him if I had been in his position,” Baylor said, “because if we didn’t make money I wouldn’t make anything.” He said Bell gave him one check for $250,000 but he didn’t cash it because “it wasn’t enough.” He later got a check for $500,000. He claimed that when he was first offered a contract in 1968, he didn’t sign it because it was “real thin.” The next contract was much thicker and thus too complicated to read, so he didn’t sign that one either. The only contract that was just right was an oral one. Baylor, claiming responsibility for the scores of Stax records charted by Billboard magazine, justified his payments from the stand, saying, “I think I made the major contribution [to Stax’s success]. In my opinion I was the difference in Stax being flat and being a major company. I was [as] effective . . . as any record man in this country.”
Respect Yourself Page 44
