4

The Drabinsky Verdict

Livent founders found guilty of fraud and forgery


 

The VerdictThe country’s biggest corporate fraud trial came to an end this morning in the Ontario Superior Court with a verdict that was concise and backed by an 85-page “Reasons for Judgment” document: Madam Justice Mary Lou Benotto found Livent founders Garth Drabinsky, 59, and Myron Gottlieb, 65, guilty on two counts of fraud and one of forgery.

The courtroom was standing-room only for the resolution of a trial that began on May 5, 2008, spanned 62 days, featured 14 witnesses, 200 exhibits, and generated more than 7,000 pages of testimonies and arguments. The direction of Justice Benotto’s judgment quickly became apparent as she began her address. She  praised  the founders of Livent, a company known for its lavish productions of Phantom of the Opera, Showboat and Ragtime, for their cultural contribution: “…the creative success you achieved through the company was spectacular,” she told the long-term partners. You performed wonders for the entertainment industry, the arts, the tourism industry and anyone who enjoyed live theatre.” But the trial was not about that, she pointed out, a fact not lost on anyone who sat through the trial, a parade of accounting forensics and conspiracy theories. It was about accounting fraud, she said, before finding the two guilty of  “deliberate misrepresentation” and “systematic  manipulation” dating back to Livent’s  founding in 1990; she also found them guilty of forgery for misrepresenting financial statements between 1993, the year Livent went public, to 1998, a fraud estimated to cost investors $500 million.

The long-term partners who built the Cineplex movie chain before their dramatic ouster in 1988 betrayed little emotion as the verdict was read: Drabinsky lowered his head, Gottlieb removed his glasses. In the gallery, their families were visibly upset. Neither Drabinsky nor Gottlieb, who were charged in 2002, testified during the trial. Nor did they comment following the verdict; their lawyers, Eddie Greenspan and his brother, Brian Greenspan, said they will comment after they review the judge’s written decision.

The lawyers will return to court on April 8 to set a date for a sentencing hearing. Each fraud count carries a maximum jail term of 14 years while the maximum prison sentence for the forged document is 10 years.


 
Filed under:

The Drabinsky Verdict

  1. Perhaps we’ll now see an all-Canadian production of “The Producers” – with Drabinsky as Bialystock, the producer looking to get rich, and Conrad Black as Leo Bloom, his nebbish accountant sidekick. Move the settign from New York to Toronto, add a few hockey jokes, and voila!

    I feel a Canada Council grant coming on…

    • Bravo David, jolly good revue. I must add though, do you realize we have a historic legal first in Canada. It’s the first time a major Canadian shyster has been brought to justice by a Canadian Court. We usually have depend on the US Dept. of Justice to do that. Harump!!! What must the alumni of Upper Canada Collage be thinking now? The peasants are revolting!! However to qualify for a Canada Council grant they will have to move the setting to Quebec City and somehow work a rewrite of Les Miserables. Cheers.

      • Yes, I recognize the incongruity of a Canadian court actually doing its job (albeit a decade and a half late). What’s next – prosecutions for insider trading on the TSX?

        Now that would be a work of fiction…

  2. The line for the job fair wrapped around two corners and extended down a
    full city block. Well, I did a little bit of time back in the day, said
    Phillip Manning, as he waited in line, and I’ve just never been able to
    past that when it comes to seeking employment. Most would-be applicants
    never made it through the doors. Thanks a lot.
    Regards,
    HGH Energizere

Sign in to comment.