Producer Garth Drabinsky, a Fugitive From the U.S., Now in Hot Water in Canada


July 6, 2001

] Theatrical impresario Garth Drabinsky, the Livent founder who produced splashy Broadway revivals of Candide and Show Boat, plus new works such as Kiss of the Spider Woman and Ragtime, is being accused by the Ontario Securities Commission of improper reporting of revenues and filing improper financial statements.



] Theatrical impresario Garth Drabinsky, the Livent founder who produced splashy Broadway revivals of Candide and Show Boat, plus new works such as Kiss of the Spider Woman and Ragtime, is being accused by the Ontario Securities Commission of improper reporting of revenues and filing improper financial statements.

Also targeted in the probe of the now-dissolved Livent's financial accounts are former Livent president Myron Gottlieb, former senior vice president of finance Gordon Eckstein, and former senior executive vice president Robert Topol. The men have denied wrongdoing.

According to the July 3 OSC statement of allegations, "The misconduct giving rise to these allegations falls into three general categories: conduct concerning the improper recording of financial information in the books and records of Livent; conduct concerning the improper recognition of revenue; and conduct concerning the payment of false invoices."

For the complete statement of allegations by the OSC staff visit www.osc.gov.on.ca.

In 1999, the Drabinsky and Gottlieb were charged by U.S. attorneys with fraud and securities violations (15 counts of fraud and one count of conspiracy). When they did not appear at a hearing in Manhattan, a warrant was issued for their arrest. They have remained fugitives in their native Canada, and have denied any wrongdoing.

In Canada, the executives could potentially lose their right to trade stock or act as directors or officers of publicly held companies. An investigation by the RCMP is also ongoing. The future is bleaker in the U.S.: Drabinksy and Gottlieb face a 10 year prison term if extradited and found guilty.

Sources of The Globe and Mail, the Canadian newspaper, said U.S. authorities have delayed seeking to extradite the two men to avoid interfering with investigations by the OSC and RCMP.

Livent was founded by Drabinsky and Gottlieb and would become the world's only publicly-traded company devoted exclusively to the production and presentation of musicals and plays. Livent operated theatres in Chicago, New York, Vancouver and Toronto. Livent built Broadway's Ford Center for the Performing Arts as a temple for its Ragtime and future productions. SFX would end up buying much of Livent's properties, both artistic and tangible.

In its short history during the 1990s, Toronto-based Livent produced The Phantom of the Opera at Toronto's Pantages Theatre. That theatrical landmark that helped solidify the city's reputation as a major theatre town and tourist destination.

Other Livent shows, or shows Livent initiated before crumbling in 1998 99, include a new staging and tour of Aspects of Love; Diahann Carroll in Sunset Boulevard (Toronto and Vancouver), a North American tour of Joseph and the Amazing Technicolor Dreamcoat; the musical, Ragtime, and its tours; Barrymore starring Christopher Plummer; the musical, Parade; a Broadway revival of Candide; the musical, Kiss of the Spider Woman;

the musical revue, Fosse; the musical, Seussical; the musical, Sweet Smell of Success (now in the hands of other producers and planned for Broadway spring 2002); and a revival of Pal Joey (not produced).

The Globe and Mail reported that Drabinsky's lawyer, Edward Greenspan, said the OSC's action "is unnecessary and serves no public interest at this time" and that Drabinsky "steadfastly and vigorously denied the allegations against him."

For all the accusations of misconduct, Drabinsky is considered by former colleagues as a man with artistic vision and the guts and talent to woo major players. The list of theatre people associated with Drabinsky in artistic endeavors over the years reads like a Who's Who of international theatre: Andrew Lloyd Webber, Terrence McNally, Harold Prince, Robin Phillips, Gwen Verdon, Frank Galalti, Lynn Ahrens and Stephen Flaherty, Alfred Uhry, John Kander and Fred Ebb, Eugene Lee, Richard Maltby Jr., Ann Reinking and more.

Ragtime, viewed by some critics as overproduced, had so many bells and whistles attached to its large-cast production that observers suggest, given the economy, it's the last huge physical production Broadway will ever see.

The first appearance by the accused is expected Sept. 11. The purpose of this first appearance is to set a date for the hearing.

By Kenneth Jones