1977 - Bankruptcy and Skateboard Parks
Financially, 1975 and 76 had not been good years for Allied. The company lost almost $700 thousand in 1975 and a whopping $3 million in 1976. Total revenues had declined to under $4 million per year. On March 4, 1977 (after a spate of lawsuits from angry creditors) the company filed for chapter 11. Only an almost $1 million loan from David Braun saved them from disappearing completely. Allied attributed its bankruptcy to three issues: the production delay for Daytona 500, unanticipated service problems with their solid state pins, and their disastrous attempt to enter the consumer market.
Aside (possibly) from Chase, Allied had not released a video game since early 1976. This may have been due to a lack of talent. On October 31, 1976 Allied had a staff of 20 engineers. By the time their 1976 annual report appeared, only 10 were left. One reason may have their video game designers began to slowly disappear. Upset with Dave Braun’s financial arrangements, Jack Pearson and Ron Halliburton left to form a design company of their own called Arcade Engineering. When they needed employees, Haliburton and Pearson called Allied Leisure, who soon found themselves without a design staff.
Allied's bottom line didn't get any better during the year, but it didn't really get any worse either. For the fiscal year ending October 31, they lost $3.1 million on sales of $3.7 million. The news wasn't all bad however. On November 3, Allied was discharged from bankruptcy. They only way they were able to keep their head above water by striking an exclusive distribution deal with Fascination, Ltd. of Elk Grove Village, IL. . They also found themselves without one of their founders when Bobby Braun (who had been replaced as president by Morton Mendes in August, 1976) died suddenly on December 28th.
1978 - A comeback? - Allied's Cocktail Table Pins
Allied rebounded in 1978, thanks largely to another pinball innovation- the cocktail table pin. Like cocktail table video games, these games featured smaller playfields and allowed the player to sit down while playing. Cocktail pins had appeared as early as the 1930s but never really taken off. Allied had actually started making the games much earlier, but exactly when is uncertain. Their 1976 annual report claims that they made 800 cocktail pins (plus 300 microprocessor pins) to date (this figure included the first few months of 1977). In June, 1976 Play Meter reported that they'd shown a game called Spirit of '76 at a recent distributor meeting, describing it as a "tennis/pin cocktail". RePlay (2/77) reported that they had shown a "prototype of a video pingame in a cocktail cabinet" at the ATE in London in January. On August 12, 1977 David Braun and Ian Richter filed for a patent on a cocktail pinball cabinet. According to their 1977 annual report Allied had introduced a cocktail pin in April, 1977 and had sold 1,150 cocktail pins that year (compared to just 375 standard pins) and 3,500 to date. No trace of these machines, however, has turned up. The annual reports mentioned that they had an exclusive distribution deal with Fascination,Ltd. (the same company that had a 1974 patent for a cocktail video game cabinet) for the games and they may have been released under the Fascination name. That was the case with The Entertainer released in early fall. The Entertainer was another Roy Clark-themed pin, this time in a cocktail cabinet. When Arnold Fisher signed Clark to a licensing deal in 1976, he announced plans to introduce more games featuring the country star's likeness, including "coffee table" and cocktail models. He even planned on showing games at the Consumer Electronics Show. It appears that Allied wanted out of their deal with Fascination and wanted to produce The Entertainer themselves but they were mired I bankruptcy at the time and had to make the deal to stay afloat (though they entered into another exclusive arrangement with Fascination in July, 1978). Allied's first pin of 1978 was actually a standard pin - March's Hoe Down (a non-licensed version of Super Picker). They followed in April with Take Five, their most successful cocktail pin, and according to most sources, their first. Later in the year they debuted two more: Flame of Athens and Hearts Spades. Allied sold 4,290 cocktail pins in 1978. As for other games, there weren't many. In May they were appointed exclusive distributors for a pool table made by Champion Billiards. They showed two games later in the year - a water-pumping electromechanical game called Space Chip and a video game called Battlestar - but don't appear to have released them. They also licensed the projection screen rifle game Clay Champ from Namco but it wouldn't be released until 1979. Thanks almost entirely to its pinball games, Allied actually turned a profit (of $3.2 million) in 1978 for the first time in five years.1979: Back in the Red
Allied's turnaround was short-lived. For those who looked beyond the numbers, this probably wasn't surprising. In 1978, for the first time, the company hadn't introduced an electromechanical game or a video game. They didn't do much better in 1979, releasing just two more cocktail pins: Disco '79 and Star Shooter as well as Clay Champ. While sales increased to $6.2 million in 1979, the highest total in since the Paddle Battle days of 1974, Allied (once again) lost almost a million dollars ($154,000 of the total came from the settlement they paid to Magnavox).
Late in the year, Allied seemed ready to mount another comeback when they announced that they showed not one, but four new video games at the AMOA show: Battle Star, Clay Shoot, Lunar Invasion, and Space Bug. Of the four, the only one that was ever actually released was Clay Shoot, a video version of Clay Champ. By the time of the show, Allied was in trouble. While they had sold 10,000 cocktail table pins since introducing the concept in 1977, they had posted losses in five of the previous six years. Allied had released a number of innovative games over the years, including shakerball and cocktail pins, the video game Ski, and arcade hits like Wild Cycle, F-114 and Super Shifter. But while their products may have been long on innovation, they were short on reliability. In 11 1/2 years of existence. Allied had turned a profit just 3 times. Not for nothing did some refer to them as "Allied Loser".
The biggest news of 1979, however, was that the company had new owners. In a June 1 agreement, Brighton Products of Binghamton, New York acquired a controlling interest in Allied. Brighton was part of the KoffmanGroup of Industries, a conglomerate headed by Milton Koffman and his nephew Burton with a reputation for taking struggling companies and turning them around. As part of the agreement, Allied's officers and directors, including Dave Braun, resigned (though Braun would stay on in an advisory role). In 1980, the company would get new leadership, a new focus, and a new name. Only time would tell if they would get a new lease on life.
 Allied's annual report reports that Braun loaned Allied $215,000 plus an additional $85,000 for 1.6 million shares of stock.
 I'm not sure then the exodus bega. The 1976 annual report came out some time after March 2 (the SEC received it in September). Arcade Engineering may not have been formed until 1978.
 The seeming discrepancy with the 1976 report may be due to the fact that the 1976 report included the first months of 1977. While Allied's fiscal year ended on 10/31, their annual reports were generally prepared in spring of the following year, and often included information on the first quarter of the next year. The 1976 report, for instance, indicates that Allied resumed pinball production in November and that the cocktail pin wasn't introduced until that time or later.
 Fascination did release a number of Allied-designed pin uner their own banner in 1979, including Circa 1933. According to Allied's 1978 annual report , the Fascination agreement had accounted for 1/3 of total sales.