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Herman Gimbel
Previously a distributor for MGM and Riverside Records, Herman Gimbel purchased the assets of Audio Fidelity in April 1965. Within his first half year of ownership, Gimbel changed the company's name from "Audio Fidelity, Inc." to "Audio Fidelity Records". He also moved its offices to West 57th Street in Manhattan, where it would remain for the rest of his tenure as company owner. In some ways, Gimbel maintained Frey's business model. He continued to issue jazz, easy listening and sound effects records on the Audio Fidelity label and also continued to seek out varieties of world music. However, Gimbel did make several major changes, largely by diversifying into other lines of music.

Initial years
Unlike Frey, who devoted little of Audio Fidelity's resources to music aimed at the rock 'n' roll market, Gimbel made that market a primary focus of the company. To that end, he began signing and recording new artists, or purchasing master recordings made by others. These recordings were released on Gimbel's new Karate Records imprint. Karate lasted about four years, releasing three albums and approximately three dozen singles. The most successful single was 1966's "Juanita Banana" (Karate 522), a novelty song that was only a minor hit in the United States, but much more popular elsewhere. Recorded by the Peels, the song reached the Top Twenty in the Netherlands and Germany, and became the No. 1 hit in Belgium and Israel. And during the summer of 1966, Gimbel entered into an agreement with the Cheetah club in New York. In exchange for being granted exclusive rights to record live performances there, Audio Fidelity would issue a "Cheetah" series of albums. But only one was ever issued, Where It's At—Cheetah (1966, AFSD 6168). In mid 1967, Gimbel started a new imprint, Mr. G Records, that issued essentially the same type of material as Karate. One difference was the occasional use of artists who had already enjoyed some commercial success with other companies, including the Earls, Don Gardner, Tony Middleton and Link Wray. By the time it was shut down in 1969, Mr. G had released four albums and about two dozen singles, none of which charted.

In his first few months of ownership, Gimbel revived Audio Fidelity's interest in classical music. He also used Frey's name for the imprint—First Component Series—but marketed it as a budget-priced label. And whereas Frey's interest had been limited to a single series of releases that lasted about a year, Gimbel maintained the First Component line throughout most of his tenure at the company and ended up releasing a much greater number of classical-music records than did Frey. Gimbel also tested the field of film soundtracks, the first foray being music from the European film Symphony for a Massacre. This was followed later in 1965 with Glenda Grainger's "Mr. Kiss Kiss Bang Bang" (Audio Fidelity 45-115), a song that used music from the James Bond film Thunderball.

In early 1966, Audio Fidelity moved into country music with the release of two singles—Forrest Green's "Mama's Boy" and Frankie Meadows' "Tennessee Diesel" (respectively, Audio Fidelity 45-117 and 45-118), both of which used master recordings purchased from other companies. Soon thereafter, Audio Fidelity acquired the newly-established Little Darlin' Records, an independent label based in Nashville. Its first release was a single by Johnny Paycheck, "The Lovin' Machine" (Little Darlin' LD 008), which reached No. 8 on the Billboard "Hot Country Singles" chart. The single was followed up by the album Johnny Paycheck at Carnegie Hall (Little Darlin' LD-4001), which reached the Top 40 of the magazine's "Hot Country Albums" chart. But even with this good start, the relationship between Little Darlin' and Audio Fidelity did not last long and by early 1967, that relationship had ended.

Towards the end of 1966, Gimbel also sought to expand the company's presence in the jazz field. He negotiated the purchase of San Francisco-based Fantasy Records, but the deal fell through at the very last stages.

Audio Fidelity's first album of rock music was released near the end of 1967. That release, How to Blow Your Mind and Have a Freak-Out Party (Audio Fidelity AFSD 6184), was accompanied by a sales promotion that offered, at a budget price, a "Freak-Out Party Kit" that included psychedelic sunglasses, incense, flowers and "hippie buttons". The album did not chart. A few months later, Gimbel tried again to enter the rock market with the newly-created label Parallax Records. Intended as a vehicle for distributing recordings made by Cincinnati-based producer Don Litwin, it issued only one album and three singles. The album was by the Sacred Mushrooms, who also served as the backing band for all three singles. None of these releases charted.

While all of this experimentation with new labels was taking place, the original Audio Fidelity label was still issuing the same types of albums as before. In these initial years of Gimbel's ownership, the company continued to release easy listening records from singers such as Bob Braun, Fran Warren, and June Valli, as well as instrumental music from, amongst others, bandleader Lester Lanin, saxophonist Fausto Papetti and harmonica virtuoso Larry Adler. It also continued to release music from around the world, including Latin jazz from Lalo Schifrin and Hungarian music from Nora Kovach. Gimbel maintained Frey's practice of issuing spoken-word records. Amongst others, these albums featured Pope Paul VI, George Jessel and Jacqueline Kennedy.

Becoming publicly-traded
Movement towards making Audio Fidelity a publicly-traded company began towards the end of 1968, when the company announced that it had arranged to issue 200,000 shares, with a total par value of $1 million, on the over-the-counter market. Details of the offering, specifically the amount actually raised and the date (or dates) it was delivered, have not been disclosed. But by early 1969, Audio Fidelity began a new round of acquisitions.

The first acquisition was a re-entry into the country music field with the purchase of Nashville-based Chart Records. Unlike Little Darlin', Audio Fidelity's earlier foray into country music, Chart Records was not a newly-established company. It had been issuing records since 1964 and achieved some commercial success, especially with singer Lynn Anderson. Day-to-day operations of the company were left with former owner Slim Williamson and, unlike what had been done with Little Darlin', Audio Fidelity did not identify itself as the owner of Chart Records on the labels of its releases. Chart's commercial success improved during Audio Fidelity's first year of ownership. That success continued even after top-seller Lynn Anderson left Chart for Columbia Records in 1970, in large part because Chart continued to issue new Anderson singles (either from album tracks or from previously-unreleased recordings). Although none of these later releases were big hits, four of them did place in the Top Twenty of Billboard's Hot Country Singles chart.

A few months after purchasing Chart Records, Gimbel bought a catalog of approximately two dozen children's records. They would be released by Audio Fidelity in 1970 under its Tiger Tail Records imprint. The records featured jigsaw puzzles that were included on the album covers. Also in 1969, Gimbel resurrected the Parallax label. It issued just one more album and single, neither of them associated with Litwin (the original producer for Parallax) and neither of which charted. The single—"A Lonely Girl" (Parallax P-404)— is notable in retrospect as being an early release by Philadelphia singer Daryl Hall.

Audio Fidelity expanded into other lines of business, as well. Gimbel purchased an agency that specialized in live music productions (especially festival-type events) and a recording studio (Sound Center) that would be used both for Audio Fidelity artists and as a rental facility for other companies' artists. Gimbel also established Tiger Tail Toys, whose marketing would be related to the children's records issued under the Tiger Tail imprint.

Financial reports for this first year of public ownership were encouraging, showing a doubling of sales revenues over the prior year. With this increased revenue, Gimbel embarked on several major projects. One such project was acquiring the film rights for a story on the life of Louis Armstrong, but this project never came to fruition. Another project was creating a made-for-television rock band aimed at the children's market. The band, called the Goggles (headed by David Spinozza), would appear in an episode of the NBC Children's Theatre that would also feature well-known stars of television and stage, such as Judy Carne, James Earl Jones and Tom Poston, amongst others. The episode aired on January 30, 1971 and was tied in with the release of an album by the band (The Goggles, Audio Fidelity AFSD 6244), as well as a book of sheet music and food, clothing and toy merchandise. Neither the album nor a subsequent single ("Don't Say You Don't Remember", AF 168) charted and nothing more was done with the band. And at some point in late 1970 or early 1971, Gimbel purchased Milestone Records, a jazz label run by Orrin Keepnews (formerly a co-founder of Riverside Records). As with Chart, the day-to-day operations of Milestone were left with the former owner.

During this initial period of public ownership, Audio Fidelity maintained activity in its traditional business areas. New signings in the field of world music included Bob Azzam (better known for his 1960 world-wide hit "Ya Mustapha") and Irish folk musicians the Clancy Brothers. And in late 1970, Gimbel acquired (or licensed) a recording by Curtis Knight that featured the pre-fame guitar playing of Jimi Hendrix. The recording was released as a single, "No Such Animal" (AF 167) in December 1970, making it one of the earliest releases of "new" Hendrix material after his death in September 1970. The single did not chart.

Audiofidelity Enterprises
In May 1971, citing a new "diversification policy", Gimbel announced that Audio Fidelity's name would henceforth be Audiofidelity Enterprises (though "Audio Fidelity" would still be the name of the record label). The change in name had been discussed in public almost a year earlier, when Gimbel stated that a new name would better reflect the "vertical development" that he envisioned for the company. Despite this announcement, there were no immediate changes in the company's business practices. But Audiofidelity did experiment with new modes of distribution in the summer of 1972. The first involved the licensing, from a London production house, of "sound alike" versions of hit records. These recordings were placed on budget-priced cassettes that were distributed by Ancorp National Services and sold not in record stores, but at newstands, stationery stores and airport gift shops. Another was an agreement with the Book of the Month Club to use Audio Fidelity LP's as book-club "dividends".

Over a span of twelve months starting in late 1971, Audiofidelity parted with two of its major record divisions. In December 1971, Gimbel sold Chart Records back to its former owner, Slim Williamson. Speaking about the transaction some two years later, Gimbel noted that the loss of income from Chart did cause a reduction in operating income for Audiofidelity. He attributed the decision to sell to the "doubtful" future profitability of the label (and, in fact, Williamson himself sold the company in 1974). And towards the end of 1972, Orrin Keepnews, the founder and operator of Audiofidelity subsidiary Milestone Records, left to become an executive at Fantasy Records. Shortly thereafter, Gimbel sold the Milestone label to a British firm (Locele), who then licensed the recordings to Fantasy.

By the mid 1970s, Gimbel had ceased his forays into new lines of business. A final attempt was made to enter the youth market via the acquisition of Thimble Records, but this yielded no successes. In 1973, the Mr. G imprint was revived to issue a novelty song about the Watergate scandal. The record, "Haldeman, Ehrlichman, Mitchell and Dean" (Mr. G, G-826) received some discussion on television network news shows, but failed to chart any higher than No. 116 on Billboard's Hot 100 (i.e., the 16th entry in the magazine's Bubbling Under chart). Despite these failures, the company maintained (via the Audio Fidelity label) its traditional lines of easy listening, international and classical music, as well as sound effects records. In this vein, 1975 saw the release of albums by two well-known television actors, Carrol O'Connor and Telly Savalas. The record by Savalas was moderately successful, reaching No. 171 on the Cash Box Top 200 Albums chart.

The only other substantive change in business operations was an increased interest in acting as a national distributor for other labels, mostly in the jazz field. Audiofidelity became the American distributor for Germany's Enja Records and England's Black Lion Records, as well as for the American label World Jazz (whose biggest act was the World's Greatest Jazz Band). But the most substantial relationship was the one developed with Chiaroscuro Records, which entered into a distribution arrangement with Audiofidelity in March 1973 but later became one of its subsidiaries. The volume of jazz records being sold through these arrangements was such that, by 1974, Gimbel was able to report that more than half of Audiofidelity's sales revenue was coming from jazz. And the volume of distribution increased in 1975, when Audiofidelity became the North American distributor for albums issued by the music division of Germany's BASF.

Sale of the company
In May 1976, Gimbel ceased being in charge of Audiofidelity's day-to-day operations, having taken the position of chairman of its board of directors. In his place, operations were headed by Bill Gallagher, a former executive at Columbia and MCA Records who began consulting for Audiofidelity a few months earlier. Later in the year, Gallagher made his own attempt to enter the contemporary market, doing so by forming a distribution arrangement with Germany's newly-established Hidden Sign Records, an early producer of disco music headed by Giorgio Moroder. He also started another Audiofidelity imprint, Image Records. Image released some recordings of soul music, but also signed bossa nova vocalist Astrud Gilberto (who recorded a disco album that included a re-make of her "The Girl from Ipanema"). It also signed acts that were better known in the easy-listening field, such as Teresa Brewer and Mike Douglas. In early 1978, Gallagher revived Gimbel's original imprint, Karate Records. The revived Karate issued just two albums, one of them by New Orleans piano player Dr. John. Neither of the two albums charted. The only other change of note during Gallagher's tenure was an expansion of distribution channels for the company's classical label, First Component Series. Here, the records were made available for sale in the five-and-dime chain Woolworth's and its discount-store affiliate Woolco.

Some two years after Gallagher became president of Audiofidelity, he left the company and was replaced by one of its long-serving executives, Harold Drayson. But Drayson's tenure as company president was even shorter than Gallagher's, lasting only about eighteen months. When he retired in early 1980, Gimbel resumed his position as company president. During his brief tenure, Drayson pursued no new lines of business. He did, however, oversee new distribution arrangements, the most notable of which was with Norman Schwartz's jazz labels, Gryphon and Skye Records.

When Drayson became Audiofidelity's president in October 1978, he did so amidst rumor that Gimbel was going to sell the company to a new owner. That did not happen, but mid 1979 saw reports of a pending sale for which the negotiations broke down at the very last stages. Finally, about six months after Gimbel resumed his position as company president, he sold his controlling interest in Audiofidelity to Dante Pugliese.

Other
Early in Gimbel's ownership, he branched into the then-non-existent home video market with a new subsidiary, Audio 20-20 Videotape. Gimbel intended to market open-reel videos that would be played on equipment not yet marketed by Sony, General Electric and Ampex. This equipment never did get marketed and Audio 20-20 issued only one tape, 1966's Johnny Paycheck at Carnegie Hall (which despite the name was recorded in front of a studio audience in Nashville).

Gimbel made an early foray into quadraphonic sound when, in 1973, he issued one of the Audio Fidelity sound effects albums in that format (Sound Effects - Volume 15, DFSQ 7054). Using a tactic reminiscent of Frey's give-away of his first stereo album, Gimbel offered to provide a free copy of his quadraphonic album to any industry professional who asked. Despite this early interest, Audio Fidelity does not appear to have issued any other quadraphonic album.

Roughly one year after purchasing Audio Fidelity, Gimbel instituted a pension plan for the company's employees. By the mid 1970s, the cost of the plan had become burdensome and Gimbel terminated it, effective June 30, 1976. Since its inception, the plan promised that, if ever it were terminated, any surplus funds held in the plan's trust fund would be distributed to the covered employees "in an equitable manner". An accounting that was performed after the date of termination revealed that the trust did hold surplus funds of approximately $43,000. Gimbel then amended the plan to remove the provision that called for distributing that surplus to the employees. The newly-established Pension Benefit Guaranty Corporation, a governmental agency with jurisdiction over pension plans, objected to this amendment and insisted that the surplus be distributed as originally promised. The dispute was heard in a federal district court, which sided in favor of Audio Fidelity. But the government appealed to the United States Court of Appeals, where the original ruling was reversed. The finding of the Appeals court became legal precedent that has been cited in subsequent cases involving similar issues.

Personal life
Little is known about Gimbel's personal life. He entered the music business as a Baltimore-based record distributor in 1949, doing so at the urging of friend Harold Drayson. At the time, Drayson was employed by MGM Records and this was Gimbel's main client during his years in Baltimore. Gimbel re-located to New York about ten years later, where he became sales manager for Riverside Records, a label co-founded by Orrin Keepnews. By 1961, Gimbel was leading LP Sales, the Riverside subsidiary that distributed its various labels and, in 1962, he hired Drayson as its sales manager. Drayson moved over to Audio Fidelity when Gimbel purchased it in 1965 and the trio of Gimbel, Drayson and Keepnews was re-united in 1970 when Audio Fidelity purchased Milestone Records.

As part of the deal that transferred ownership of Audiofidelity to Pugliese, Gimbel was given a five-year consultancy contract. However, he does not appear to have made any public pronouncements on behalf of the company during those years.

In 1969, shortly after Audio Fidelity became a publicly-owned company, Gimbel and his wife started the Helen and Herman Gimbel Charity Fund, a section 501(c)(3) non-profit organization. Originally based in Coram, New York, it is now located in Boca Raton, Florida. As of 2015, the fund has retained its nonprofit status and makes grants to various organizations in the fields of art, education and medical care.

Dan Pugliese
Dante "Dan" Pugliese entered the music business in the mid 1960s. He started as the owner of a retail record store, but soon moved into the distribution of budget-priced and cut-out records. Originally operating under a variety of corporate names, Pugliese eventually consolidated his various enterprises under the umbrella of Springboard International Records. Springboard went bankrupt in 1979 and, about a year later, Pugliese purchased his controlling interest in Audiofidelity.

Changes in operations
Shortly after the purchase, Pugliese announced that he planned on maintaining the company's offices in New York and expanding the size of the staff. He also announced that Audiofidelity would introduce a new label aimed at the pop music market. None of these intentions were realized. After about one year of ownership, Pugliese moved the company's main office to Rahway, New Jersey, the city that had been the home of Springboard. As for competing in the pop music market, Pugliese did establish an r&b/soul label in early 1981 (Knockout Records), but it was very short-lived. And less than a year after that brief outing, he announced that Audiofidelity would stay out of the popular music market altogether. Instead, the company would concentrate on its distribution arrangements, including non-traditional sales outlets such as supermarkets and drug stores. By the time Pugliese made this announcement, Audiofidelity's full-time staff had been reduced to half of what it had been during Gimbel's ownership.

Within his first year of ownership, Pugliese extended the company's presence in Latin music by becoming the distributor for Coco Records, an independent label largely known for its recordings of Eddie Palmieri and other salsa acts. He also increased the company's investment in jazz, by purchasing Norman Schwarz's Gryphon label (for which Audiofidelity had been acting as distributor since 19__) and Charlie Parker Records (which held the master recordings of almost all of Parker's recorded work). Distribution in England was strengthened with the establishment of Audiofidelity's first subsidiary there–Audiofidelity Enterprises (UK).

Before he purchased Audiofidelity in 1980, Pugliese had already established Phoenix Entertainment and Talent. This entity maintained various record labels, including Phoenix Records (along with the similarly-named Phoenix 10 and Phoenix 20), Holiday Records and Jazzbird Records. Although the packaging for the albums did not always mention Audiofidelity, not even as a distributor, both Pugliese and the trade press routinely referred to the various Phoenix Entertainment labels as part of Audiofidelity's line.

Back in the early 1970s, Pugliese's Springboard International released four albums of pre-fame material by Jimi Hendrix and, in 1981, Pugliese re-issued them. They were also issued in England by Audiofidelity's subsidiary there and also saw additional US releases in several compilations, issued at various points between 1981 and 1983. In 1984, PPX Enterprises, which had been issuing its own (different) pre-fame Hendrix recordings, sued Audiofidelity, citing several causes of action including a violation of the Lanham Act. PPX was not alleging any copyright infringement on the part of Audiofidelity. CHECK THIS Instead, PPX alleged that ____. Final resolution of the action came in 1987, when the ____ ruled that Audiofidelity was liable for damages to PPX on the Lanham Act violation.

Bankruptcy
'''In In re Audiofidelity Enterprises, Inc., 103 B.R. 544 (Bankr.D.N.J.1989) (Tuohey, J.), the court was faced with a conflict between fostering the policies under chapter 11 of the Bankruptcy Code and preserving copyright rights. Judge Tuohey determined that the copyright rights were paramount where debtor had been found liable for infringement and therefore ordered destruction of the offending materials pursuant to 17 U.S.C. § 503. Id. at 547-48. He so ordered even though the materials would have yielded $300,000 for the estate if they had been sold.''' http://chapter11cases.com/2012/07/01/in-re-clark-entertainment-group-inc-183-br-73-bankr-court-d-new-jersey-1995/