Livent, the troubled Canadian theatre production giant, walked away from New York Bankruptcy Court on Dec. 30 with a few million more in its pocket and a few days more to live. The court signed off on the second and final payment, totaling $11.5 million, of Debtor-in-Possession (DIP) financing which Livent secured from the investment management firm of Angelo, Gordon & Co. in November. On Dec. 3, Livent collected the first DIP payment of $13.4 million.
Livent also, once again, delayed its report on its 1998 third quarter finances, which it had hoped to release in December. The company said it was further assessing the situation but did not specify when a report on the third quarter would be forthcoming.
Livent officials said they believed the extra DIP millions would take the struggling company through their current reorganization. That restructuring has involved many recent dismissals. Anticipating fraud charges by the Securities Exchange Commission (SEC), Livent fired, on Dec. 4, five financial officers, including chief financial officer Maria Messina. The action was taken on request by the SEC, which according to court papers, has "launch[ed] independent investigations concerning the businesses of [Livent]."
"An immediate result of the investigation being conducted by the SEC...," the papers said, is "it is no longer appropriate for five individuals who comprise the major portion of [Livent's] finance and accounting department to remain employed by [Livent]."
According to reports, the five officers told the SEC they assisted ousted Livent chiefs Garth Drabinsky and Myron Gottlieb in manipulating the accounting books and were afraid they would pay with their jobs if they did not. Drabinsky and Gottlieb were dismissed last month. Livent's new management team, headed by Roy Furman and Michael Ovitz, has accused them of widespread fraud. In the meantime, Livent has petitioned for permission to hire back the five financial officers it fired on a temporary basis "to provide the information necessary to obtain full DIP financing and to assist in completing [Livent's] third quarter financial statements."
The SEC told Playbill On-Line it had not yet filed any charges against Livent. A spokesman declined to comment on when such charges might be forthcoming.
Livent is also being investigated by the Royal Canadian Mounted Police, the U.S. attorney's office in the Southern District of New York, and the Ontario Securities Commission.
In recent days, Livent tried to make itself more attractive to investors by eliminating some 100 of 250 full-time Livent employees, most in Toronto, in the wake of Livent's bankruptcy crisis.
Most of the full-time employees, from managers and producers to press agents and accountants, were in the Toronto office of the beleaguered musical theatre producer and theatre operator. The Vancouver and New York offices lost employees as well, according to Badenhausen.
-- By Robert Simonson