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Livent’s “friendly” fire

The departure of a high profile Livent employee was preceded by a “humiliating” harangue by Livent founder and CEO Garth Drabinsky, an Ontario court heard today. Drabinsky was abusive, profane and humiliated Lynda Friendly in front of other Livent executives, the theatre company’s former publicity executive complained in a letter to Drabinsky.

The letter was contained in a memo Drabinsky sent to members of Livent’s board of directors in October 1997 informing the directors of his intention to fire Friendly within the week. In the letter, Friendly complains of Drabinsky’s behaviour during a meeting the previous month where Drabinsky exploded in an expletive-laden tirade against the former executive. “You responded by screaming at me and using the word `fuck` repeatedly, telling me (amongst other insults) that I don’t know `what the fuck I was talking about,`” she wrote in the letter.

The other Livent executives present at the meeting left in disgust, Friendly said in the letter, one of them uttering “I can’t take this.” But Gottlieb continued to lay into Friendly adding: “Who the fuck do you think you are to tell me how to address you in my office? I’ll do what I want. I run this company.”

Friendly threatened to take her concerns to the company’s board and said her only regret was allowing the situation to continue as long as it had. A week later, Drabinsky made good on his word and Friendly was terminated. Gottlieb wrote in a letter presented in court that Friendly’s services were being terminated because “your work relationship with senior management has progressively deteriorated,” the court heard.

Drabinsky and Myron Gottlieb have pleaded not guilty to two counts of fraud and one count of forgery.

It wasn’t clear from either Drabinsky’s or Gottlieb’s letters what concerns prompted such an angry reaction. Questions about the Friendly letter were cut short when Eddie Greenspan, the defence lawyer representing Drabinsky, objected to the presentation of the letter during his examination of Gordon Eckstein, Livent’s former senior vice president of finance and administration.

Chief Livent prosecutor Robert Hubbard argued that the letter illustrated the tense atmosphere that existed at Livent and the fact that Drabinsky had total control over the company. At the urging of Madame Justice Mary Lou Benotto, the judge overseeing the case, prosecutors moved on.

But that was not the only time Friendly complained about problems at Livent. Hubbard showed the court an earlier letter written in March 1996 by Gottlieb to Friendly in which he appears to be replying to a letter of complaint from the executive. The letter does not reveal the source of Friendly’s concerns, but Gottlieb wrote that there is much in her letter that he does not agree with and warns her not to take any action that would cause “disruption or discord amongst Livent employees or jeopardize the Livent financing efforts.” At the time Livent was engaged in a large — and ultimately successful — equity financing in the U.S., Eckstein testified.

This is not the first time the court has heard of Drabinsky’s allegedly abusive behavior toward employees. Quarterly financial meetings where company executives would gather to review the company’s flagging financial performance and discuss accounting schemes to improve its reported results were often loud and tumultuous affairs, Eckstein testified earlier in the day. During particularly acrimonious meetings Drabinsky would instruct Eckstein to sit in a chair in front of his desk: “That way it would be easier for him to strangle me,” Eckstein told the court.