Blogs & Comment

March 24 - D-Day for Drabinsky and Gottlieb

Garth Drabinsky and Myron Gottlieb will learn their fate on March 24 – the day Justice Mary Lou Benotto delivers her verdict in the criminal fraud trial of the two Livent founders. Benotto has overseen the trial – which began in May last year – without a jury.
Drabinsky and Gottlieb have both pled not guilty to two counts of fraud and one count of uttering forged documents relating to a massive accounting fraud at the theatre company that produced such massive Broadway hits as Phantom of the Operaand Kiss of the Spider Woman.
The judge has her work cut out for her. Her decision will have to address the complex conspiracy theory put forward by defence lawyers Eddie Greenpan, who is representing Drabinsky, and Brian Greenspan who represents Gottlieb. Both defence lawyers submitted hefty written final arguments that allege their clients were framed by a cabal of Livent accountants, new company managers, lawyers and outside accounting firms that represented Michael Ovitz, the former Hollywood superagent and Livent investor.
Prosecutors, on the other hand, argue the evidence against the two executives is “overwhelming.” Not only did Drabinsky and Gottlieb know about the fraud at the company, but they directed a pattern of accounting manipulations that routinely transformed millions of dollars in losses into profits, prosecutors allege.
Drabinsky and Gottlieb each face a prison sentence of up to 10 years if found guilty. A guilty verdict would also have a major impact on the hundreds of millions of dollars in outstanding civil lawsuits related to the alleged fraud. Livent has filed a lawsuit against Drabinsky and Gottlieb seeking as much as $100 million and a separate $450 million lawsuit against Deloitte and Touche, the company’s former auditing firm.