Cannon Films’ Chief Financial Officer Resigns

The chief financial officer of Cannon Group has resigned after working just five months for the troubled entertainment firm, industry sources said Tuesday.

Susan Beazley, who gave up an 11-year partnership at Arthur Young & Co. to join Cannon in January, could not be reached for comment. But a friend, who asked not to be identified, said he believes that Beazley resigned more than a week ago.

No direct confirmation could be obtained from officials of the Los Angeles-based film company. Barry I. Lublin, a senior executive vice president, said through a spokeswoman, “There will be a press release Thursday or Friday regarding Sue and other matters.”

Cannon recently said it would release its long-delayed annual report to the Securities and Exchange Commission the first week of June, and said it was “hopeful” that it would soon conclude settlement discussions with the SEC staff, which has been investigating Cannon’s financial public disclosures since 1983.

Posted Net Loss

Cannon hired Arthur Young last autumn to audit its 1986 figures. Last month, the company reported a net loss of $60 million for the year ended Jan. 3, and said Arthur Young had advised the company that it was likely to qualify its opinion on the 1986 financial statements. According to Cannon, the accountants’ opinion might be qualified in three areas: Cannon’s ability to continue as a “going concern,” the outcome of shareholder lawsuits and the effect of the SEC inquiry.

In a separate development, Cannon disclosed that its borrowing agreement has been amended to allow its bankers to demand a $25-million prepayment if the company’s shareholder equity drops below $37.5 million for two consecutive quarters.

Cannon said last month that its shareholders’ equity--total assets minus liabilities--dropped to $50.7 million as of Jan. 3, down from $126.8 million reported for the nine months ended Sept. 27, 1986.

The bankers said the prepayment would be required only if similar prepayments are required by Cannon bondholders, who have the right to demand 10% of the face value of $207 million in bonds if shareholder equity falls below $37.5 million for two quarters.