Canadian theatre impresarios lose fraud appeal

Judd Hollander
,

Garth Drabinsky and Myron Gottlieb, former executives and co-founders of the Livent theatrical organisation, have begun serving jail sentences on their convictions of fraud, bringing down the curtain on a saga that has continued for more than a decade.

They were this week denied their appeals against sentencing by Ontario Court of Appeal.

A statement from the court’s 69-page ruling read: “The appellants raise a number of arguments which, in large measure, challenge the findings of fact made by the trial judge. We see no reversible error and would dismiss the conviction appeals.” Drabinsky and Gottlieb were each convicted on two counts of fraud in 2009 in Ontario Superior Court.

Livent was a major player on the New York and Canadian theatrical scene from the early 1990s. The company, as well as Drabinsky, quickly became known for their big budget productions and extravagant style. However, accounting irregularities began to crop up towards the end of the decade with Drabinsky and Gottlieb being accused of moving monies to different accounts to make it appear that the company had far more cash than it actually did.

By the end of 1998, the company had declared bankruptcy, with investors losing an estimated $500 million. Most of the Livent assets were eventually acquired by SFX Entertainment, which has since become the company Live Nation.

Among the shows Livent was involved with included productions of Showboat, The Phantom of the Opera and Kiss of the Spider Woman.

Drabinsky and Gottlieb, both Canadian citizens, fled the US in 1999 in the face of charges about to be filed against them in the US Court for the Southern District of New York and by the US Securities Commission. These charges are still pending.

The two returned to Canada where they were arrested in 2002, after the Canadian authorities had completed their own investigation. The case has been working its way through the courts ever since.

Both men, who have consistently proclaimed their innocence of any wrongdoing, saying any irregularities had been the fault of other Livent employees, had been free on bail awaiting the outcome of their appeal, but surrendered to police on September 12, as was required, to await the announcement of the court’s decision.

While the Appeals Court did not overturn the lower court verdict, it did cut Drabinsky’s sentence from seven years to five, while reducing Gottlieb’s potential time in prison from to six years to four. Under Canadian law, the men can be eligible for parole after serving one-third of their sentence. Thus, Drabinsky could conceivably be freed after serving 20 months, while Gottlieb would have to serve only 18.

At press time it was not known if either man would appeal their case to the Supreme Court of Canada. If that were to happen, both Drabinsky and Gottlieb could conceivably remain free on bail while the appeals process continued. However Canadian legal experts have noted it is not likely the Supreme Court would accept such a case as it usually only deals with specific errors of law and rejects far more cases than it accepts.

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