Blogs & Comment

Drabinsky Final Argument - 21: Messina's Memos

The defence has always maintained that Messina and Chris Craib conspired to frame Drabinsky and Gottlieb for the fraud. The key to that conspiracy is an alleged April 24th meeting attended by Drabinsky, Eckstein and Craib where Drabinsky openly discussed accounting manipulations. Craib told Messina about the meeting and she wrote a memo decrying the plan which was followed up with a face-to-face meeting where Messina threatened not to support the company’s financials to the auditors and the board.
The defence dismiss the story as an outright lie. But Messina did write that memo and she did have a meeting with Drabinsky and Gottlieb. The memo, the defence argues, never uses the word “fraud” or even states that the alleged manipulations are not in accordance with gnerally accepted accounting priniciples (GAAP).
In the meeing, Messina tesified that she told Drabinsky and Gottlieb that she was not comfortable reporting any earnings for the first quarter of 1998. (The company ultimately reported a $20 million loss for the period). Messina’s description of Drabinsky and Gottlieb’s reaction “seriously undercut her testimony,” the defence argues. “If Drabinsky and Gottlieb knew about the fraud, they would have understood the memo to mean Messina wouljld not continue to support the fraud. So there should have been a furious reaction.” Greenspan argues.
Of course, if they didn’t know about the fraud, wouldn’t they be more than a little confused? But in fact, there is no evidence that the Livent founders ever asked “what are you talking about?”