Curtain call: A look at key events in the Livent Entertainment fraud scandal
TORONTO – The story behind the Livent Entertainment financial fraud scandal is one of deception and defiance that culminated with a spectacular fall from grace for one of Canada’s best-known theatre impresarios. Here’s a look at key events in the saga:
1989: Livent Entertainment is formed. The theatre production company builds a reputation for putting together smash hits with the success of “Show Boat,” “Ragtime” and “The Phantom of the Opera.”
May 1993: Livent goes public, trading on the Toronto Stock Exchange.
Advertisement
April 13, 1998: Garth Drabinsky, who co-founded the company, steps down as CEO.
Aug. 10, 1998: Drabinsky is suspended as Livent’s vice-chairman and chief creative director as the company levels allegations of accounting irregularities and warns of possible earnings restatements as far back as 1996. Myron Gottlieb, who also co-founded Livent and served as its president, is suspended as well.
Nov. 18, 1998: Livent files for Chapter 11 bankruptcy protection, fires Drabinsky and Gottlieb, and launches a lawsuit to recover $225 million in damages from alleged fraud and accounting irregularities.
Jan. 13, 1999: Drabinsky and Gottlieb are charged in the U.S., accused of inflating earnings reports and taking kickbacks worth US$4.6 million. “The final act of this tragedy has yet to be played out,” Drabinsky says. “I have complete confidence that we will be vindicated.”
August 1999: U.S.-based SFX Entertainment buys most of Livent Entertainment’s assets, including theatres in Toronto, New York and Chicago. The deal is valued at US$97 million.
Advertisement
July 3, 2001: The Ontario Securities Commission launches cases against Drabinsky, Gottlieb and Gordon Eckstein, Livent’s former vice-president of finance. The regulator alleges that Livent made misleading or untrue financial statements and the three men allowed that to happen. The commission also alleges the company kept two sets of books — one for actual results and another for the public.
Oct. 22, 2002: The RCMP charge Drabinsky, Gottlieb and Eckstein, accusing them of bilking investors and creditors of $500 million by falsifying financial statements from 1989 to 1998.
2007: Eckstein pleads guilty to fraud and is given a conditional sentence of two years less a day.
March 25, 2009: Drabinsky and Gottlieb are found guilty of fraud and forgery.
Aug. 5, 2009: Drabinsky is sentenced to seven years in prison. Gottlieb is given a six-year prison term.
Advertisement
Sept. 13, 2011: The Ontario Court of Appeal rejects a bid by both men to have their convictions overturned. But the court trims their sentences by two years.
March 29, 2012: The Supreme Court of Canada refuses to hear an appeal by Drabinsky.
Feb. 21, 2013: The Ontario Securities Commission, which had put its cases against Drabinsky, Gottlieb and Eckstein on hold pending the outcome of their criminal charges, revives the regulatory proceedings.
Sept. 5, 2014: Gottlieb reaches a tentative settlement with the OSC. He is banned for life from serving as a director or officer of a public company.
May 22, 2015: Eckstein reaches a tentative settlement with the OSC. He is also banned for life from serving as a director or officer of a public company.
