It was one of the medium-sized firms established during the early boom years of the Weimar Republic.
[1] In 1927 the studio became involved in major controversy during the Lohmann Affair, when it emerged that the company had secretly been granted a large sum from the German Navy Department geared toward military propaganda and support of rearmament at a time when this was forbidden by the Treaty of Versailles.
The ensuing scandal led to a political crisis in the Weimar Republic and the resignation of Otto Gessler as Defence Minister.
In 1928 the Munich-based Bavaria Film bought up the remaining assets of the company [3] Its former production chief Ernst Hugo Correll was appointed as the new head of Germany's largest company UFA.
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