10
University Daily Kansan
Thursday, November 29,1979
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Pinball...
From page one
to repossess $95,000 worth of machines he had sold to Oakley in 1977-78.
mungueged that Oakley failed to keep up on payments for about 70 machines he had sold. Heikin, however, filed a counterclaim alleging that Mussel had used the company's technology and had promised to "help him compete with other amusement companies."
According to Oakley's counterclaim, Moss said that the only way to stay in the vending and amusement business was to get big but get bigger and the little get bout out."
"You have to let us help you and shape you," Ms allegedly told Oakley, as stated in the counterclaim, "We want all the pie."
In the suit, Oakley said Moss asked him to write out 21 checks with the promise that he would send them back as many weeks, but then began cashing the checks every week, causing Oakley "financial stress."
In addition, Oakley alleged that Moss frequently telephoned him demanding money and asking Oakley to sell his route.
but despite opposition from Oakley and his wife, Judy, the court ruled that Moss could repossess the machines.
On one occasion, Oakley claimed, Moss called on his answering service and requested that Oakley give him the public address system at one of Oakley's locations. "Either pay my money or leave."
Moss then sold the repossessed machines to Armour for $46,904 in March 1979. Moss, however, allegedly failed to publicly announce that which is required by law in such forefeesures.
Oakley argued that the unannounced sale was evidence of "collision" between Moss and Dennis. Oakley said working together to "drive Oakley out of business in Douglas and other surrounding areas."
Oakley's attorney, Lance Bursi, said in the counterclaim that Moss was doing Armour's dirty work. He said Moss's scheme was to "get people in the head, and troop them."
"There's money in that," Burr said.
There's money in that. You should.
Burr claims that business in the entertainment machine industry is often carried out as said the Moss business was.
"Their (the Oakley's) experience is representative of what happens in the field." he said.
To help the Oakley's case, Jonathan Katz, former promotion director for the Seventh Spirit Club, 642 Massachusetts St. filed an insurance claim against Armour could have been working together.
Katz claimed that on three occasions, representatives of both companies approached him with information that Oakley "would be going out of business very soon—that they were going to lose the lawsuit with Philip Moss & Co."
Moss's attorney, however, rebels the implication that the two companies were working to run Oakley out of business.
He contends that it is natural that Moss would look to Armour, the only other pinchback operator in Lawrence at the time, to sell the used machines.
Moss's a lawyer said that the transaction between Moss and Armour was conducted in a reasonable manner and that "Moss has no financial or blood relationship to Armour."
Although Oakley holds to his accusations against Moss and Armour, he is being sued by a different machine supplier in Kansas City. Mo.
Early this year, Philip Moss was killed when the Cessna 421 he was plucked crushed into trees about two miles north of the downtown Kansas City, Mo., airport.
In September, Rowe International, Inc. began foreclosing on 61 machines Godwin purchased. Rowe alleged that Oakley defaulted on machine payments totaling $2 million.
Oakley, however, claims that Rowe, like Mess, tricked him into buying the merchandise and promised to help him compete.
The Moss-Oakley lawsuit provides the most detailed insight into the pinball business, because many bar owners and managers were reluctant to talk to the Kansas about pinball profit. One Lawrence lawyer said that he not be idified explained:
"The IRS is a big reason. Nobody knows how much money I make on machines. Therefore, I can report any of it or all of it."
"I think that anyone who reports all of it would be foolish - or painfully honest."
Among business tactics under question in the attorney general's investigation are possible close financial connections between companies and establishments that use their machines.
The fear is that the machine operators, through loans to taverns, may be able to get controlling interests in bars and dictate which operator's machines are used.
The same bar owner, who wished to remain unidentified, said that at least one of their employees needed help who needed funds to improve their establishments or to get out of debt. Part of the problem was that some employees
Q. Do amusement machine distributors encourage bar owners to take loans out from them?
A. If a bar runs into financial trouble and they can get a loan cheaper through Armour, they'll take it.
Q. Do you think there is more than a couple thousand dollars out to bars from amusement machine distributors?
A. I would guess that there would have to be more than that.
Q. Why would a bar owner not want to borrow money from a machine operator?
A. If you are loaned money then they have a lien on your business. If your contract states that they can take you over, then they have a controlling interest in your business. I would be hesitant about borrowing money from a lender because profit from going out of business.
A. Yes, but a bank does not have any interest in running a bar. The machine suppliers end up owning some of the bars it has machines in.
Q. Doesn't a bank have the right to collect on a defaulted loan?
Arnour service manager Paul Linden said Arnour mounted the buildings of two Lawrence taverns: The Other Place, 1717 and La Crescent, 1806. The latter, which used to judge The Hakkari Inn.
"If you own property and want to lease it out, I don't see anything wrong with that," he said.
Missouri laws prohibit this kind of arrangement, Linden said, but it is legal in Kansas.
Emick, who sold his business to Armour, also said he had interest in several taverns and restaurants. Emick owns the buildings which house Louise's Bar, 1009 Massachusetts Avenue, and is also used to the location of The Horse 1031 Massachusetts St.
Erick also said he often loaned money to taverns if they were in financial trouble or wanted to remodel while he was in the business.
He said, however, that he never had more than a couple thousand dollars out at one time.
"I've loaned money to taverns many times," Emick said. "The payback usually came from the machines."
He said that either the bar did not get any of the money from the machines until the
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Arms also loaned money to various bars, but the loan was more like an "advance on revenue" from the machines, Linden said.
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Despite the ease with which Emick and Armour discuss their operations, information about profits in the pinball business generally remains obscure.
Linden said bars would borrow "several hundred dollars or so on an emergency basis for repairs or added fixtures."
loan was repaid or it got a reduced amount. Instead of the usual 50-50 split, Emick would take a larger percentage.
Jim Wayland, owner of Delmar's Bar and Grill in Edina or KU reporting student claims of being clawed by machine operators and the U.S. government that they were making less money.
Other taverna employees contacted by the Kansan refused to discuss amusement machine income, although many said they could not survive with the machines.
One bar owner said people were wary about discussing the business because some suspect the business has underworld connections.
In an interview with Bill Wash, owner of Quantrill's Saloon, 715 Massachusetts St., this suspicion became apparent.
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When the Kansan asked for comment on only the current attorney general's investigation, Wash said, "On, you want to know if I think Armour is connected with the
He said, however, that Armour was helpful to him when he had machine problems. He said Armour often shifted machines to different locations where they might prove more profitable and said Ar-
man collected the machine money every week.
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"I count right along with them," Wash said.
When asked if Armour ever helped him financially, Wash said, "I'd rather not answer that."
"No, I have no reason to believe that they are," he continued. "Arnow has only done good by me. I don't have anything against them."
Tomorrow: The status of the Kansas attorney general's investigation.
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