By The Canadian Press
TORONTO — The spectacular fall of two of Canada’s highest-flying theatre impresarios ended with an emphatic thud Wednesday as Livent Inc. co-founders Garth Drabinsky and Myron Gottlieb were found guilty of cooking their company’s books and defrauding investors of millions.
As family members wept, the grim-faced men, whose Broadway and Canadian productions of Kiss of the Spider Woman, The Phantom of the Opera and Show Boat thrilled audiences across the continent, left court in silence.
Ontario Superior Court Justice Mary Lou Benotto delivered a brief oral judgment by starting with some high praise for the two men before pronouncing a guilty verdict to a standing-room-only courtroom.
“The creative success that you achieved through your company was spectacular,” Benotto said. “It performed wonders.”
While the well-deserved success and honours the men achieved “reflected favourably” on all Canadians, Benotto continued, the trial was about the company’s dishonest accounting practices, not about its theatrical successes.
“The accounting system was fraudulent,” she said, before pronouncing the duo guilty. “You knew what was happening.”
Drabinsky, 59, who was named to the Order of Canada, and his business partner, Gottlieb, 65, deliberately misrepresented their company’s finances before it went public in the early 1990s.
They then “systematically manipulated” the books to outwardly increase profits, Benotto said.
She compared Livent’s growth to “an athlete taking a performance-enhancing drug” that might lead to fantastic results but which nevertheless “involves cheating.”
The convictions on two counts each of fraud and one of forgery carry respective maximum sentences of 10 and 14 years. The men, who have not been in custody, will appear in court April 8 to begin the sentencing process.
The pair were represented by the legal “dream team” duo of brothers Edward and Brian Greenspan, who said they would only comment after reading Benotto’s 80-page-plus written decision.
“We have not read it and we need an opportunity to review it carefully,” said Edward Greenspan, who defended Drabinsky.
“We have to do that before we can make any comment.”
The men had pleaded not guilty to all charges, arguing that underlings had cooked the books without their knowledge.