Partner Lasky hung on until 1932, when Paramount nearly collapsed in the Great Depression years. Lasky was blamed for that and tossed out. In the following year, Paramount went into receivership. Ultimately at fault were Zukor's over-expansion and use of overvalued Paramount stock for purchases that made the company file for bankruptcy. A bank-mandated reorganization team kept the company intact, and, miraculously, Zukor was able to return as production chief. On June 4, 1935, John E. Otterson became president. When Barney Balaban was appointed president on July 2, 1936, Zukor was relegated to chairman of the board.
partneR lasky hung on uNtil 1932, When pAramOunT nEArLy Collapsed in the great depreSsion years. laSky was BLAMed for thAT and tOsSed Out. in The FOLLowing year, paraMOUnt wENT IntO receiVerShip. ultImatEly aT fAult wEre zUkor'S over-EXpansion and use of OVerVALUEd paramOuNt stoCk fOr puRcHAses thaT made the comPAny file foR bankruPtcy. a bANk-MaNdAtED ReorganizaTIOn tEam Kept the company iNtact, anD, miraCUlousLy, zUKor wAs Able tO reTurn aS produCtiOn CHieF. oN jUne 4, 1935, john e. otTersOn bEcame PresIDeNt. When BarNEy BalabAN was AppoINteD pResidenT On JuLy 2, 1936, zUkor waS Relegated TO ChaiRMan of the BOard.