PORNO FIRM GOES BUST : Essex Video, Called One of Big 3 Distributors, Files for Bankruptcy

When Essex Video went bankrupt three weeks ago, owing creditors almost $1 million, it was more than just a story of another local family business gone bust. The Northridge company’s collapse marked the demise of what police said had been one of the country’s three biggest producers and distributors of pornographic films.

In its April 5 bankruptcy filing, Essex said it had no assets and produced a list of nearly 100 creditors, including movie director John Derek. Essex owes Derek--the husband of actress Bo Derek--$6,500 in royalties from a pornographic film titled “Love You” that he made in the mid-1970s and sold to the company.

“It’s strong, it’s graphic but it’s not kinky,” Derek said in an interview last week. “Some people said I made a hair-cream commercial not a porn flick.” Derek doesn’t expect to be paid. “I think people should get their money, but I’m not going to go down and stand in line,” he said.

Big 3 Producers

Only a few years ago, Essex Video, along with Caballero Home Video in Canoga Park and Video Company of America in Chatsworth, had been the Big 3 producers and distributors in the pornographic film industry, according to Sgt. Don Smith of the Los Angeles Police Department’s vice unit.

Essex Video was started in Hollywood in the late 1960s by Joe Steinman, an emigre from Colombia, who bought the rights to adult films and sold copies to movie theaters across the nation. At one time or another, all four of his sons worked in the family business doing odd jobs, helping Steinman build a library of 200 titles.

But it was his second son, Jeff, 30, whom Steinman groomed to lead Essex into the video age.

Jeff Steinman, however, has more to worry about than Essex’s financial collapse. On Thursday, he is scheduled to appear in U.S. District Court in Memphis, where he said he will plead guilty to 16 counts of shipping obscene materials through United Parcel Service. The Justice Department alleges that since 1982, Steinman was shipping what the agency said were obscene videos across state lines, which is a federal offense.

Both the prosecutor in the case and Steinman said he is expected to serve about two years in a federal prison.

Steinman’s legal expenses didn’t help Essex. His legal costs were at least $100,000 in 1987, according to Essex’s bankruptcy filing.

Son Denies Production

Steinman, however, denied that his company ever produced pornographic pictures, which would be a violation of California’s pandering laws if the movies were filmed in state. He said it only distributed films.

After a very brief interview, Steinman refused to discuss anything further about Essex. He since has had his phone disconnected.

Steinman did say that he started working in Essex’s warehouse when he was a junior at Birmingham High School in Van Nuys. “I did anything and everything,” he said. Sometime after his father retired in 1979, Jeff Steinman was named company president.

Shortly afterward, home videocassette recorders were introduced and for a while Essex flourished as it transferred its extensive film library to tape. Jeff Steinman refused to disclose the company’s revenue or profit figures, but several industry insiders said that at its peak Essex had 65 employees and had annual sales of $40 million.

Real estate records indicate Steinman profited handsomely. Last year, he paid $975,000 for a five-bedroom, five-bathroom house in Canyon Country.

$750 Million in Sales

Smith said the adult film industry generated $750 million in sales in the Los Angeles area last year. And by his calculations, there were 37 local adult video corporations, including Essex, with the biggest of them taking in profits of $10 million each.

The advent of videocassette recorders opened up the home market for Essex. But because videotape is inexpensive to produce and distribute, it invited new competition.

“Today there are tapes selling for $5 that were selling for $42 two years ago,” said Eugene Marino, a former Essex salesman.

Actress Paid $150,000

One of Essex’s strategies was to sign well-known porn stars to exclusive contracts, such as Barbara Dare, who said she appeared in 10 films a year for Essex at an annual salary of $150,000.

But Jared Rutter, editor of Film World Reports, a trade publication, said all the money didn’t necessarily pay off in hit films. “Essex put too much money into production,” he said, and Essex produced its share of flops.

The patriarch of the business was Joe Steinman, who was born Jose Domingo Restrepo in Bogota, Colombia, sometime in the mid-1930s, court records indicate. By the late 1960s, Essex was up and running. In 1971, Restrepo changed the family name to Steinman; even his son Jeff isn’t sure why.

Through his son Tony, Joe Steinman refused an interview request.

New Company Begun

Another mystery is what happened to Essex’s films and licenses. Former Essex salesman Marino has started a new adult video company called Essex West. It took over Essex Video’s Northridge headquarters and has thousands of videocassettes in its warehouse.

But Marino insists Essex West has no connection to Essex Video. “I licensed the name Essex from the copyright holder, a foreign company,” Marino said. “I have a new business.” But Marino said he didn’t remember the name of the foreign company.

He also said the Steinmans are not connected to Essex West. “I have a silent partner,” he said. Marino refused to name the individual.