It's Curtains (and Maybe Jail) for Former Broadway Producers
If Mel Brooks had written his smash show The Producers today, he might be tempted to change the names of the two scheming lead characters from Max Bialystock and Leo Bloom to Garth Drabinsky and Myron Gottlieb.
More than a decade ago, Drabinksy and Gottlieb were seen as the future of theatre after they created Livent (formally, the Live Entertainment Corporation of Canada, Inc.) in 1989. The company was said to be the only public company whose main function was producing commercial theater. At one point, it was the largest live theater company in North America, owning theaters in both the US and Canada. Its productions, including Fosse, Ragtime, and Kiss of the Spider Woman, won 14 Tony Awards.
Today, Drabinsky and Gottlieb are criminals. A Canadian court this afternoon convicted the pair of accounting fraud and said they had overstated Livent's finances for years. They still face 10-year-old fraud charges in the US.
"The creative success that you achieved through your company was spectacular," Ontario Superior Court Justice Mary Lou Benotto told Drabinsky and Gottlieb as she rendered the verdict. "The trial, however, was not about that. The trial was not about the success of Livent. The trial was about the accounting practices of Livent."
In her 85-page ruling, Benotto said of the fraud: "The financial statements were manipulated. The object was to keep income as close to budget as possible. This was done by moving expenses from one period to another, by amortization roles, by applying the expenses of one show to another and by allocating operating costs to fixed asset accounts."
The producers first were accused of fraud in 1998, when former Disney executive Michael Ovitz was brought in to run Livent and discovered financial irregularities. The company filed for bankruptcy and filed a $225 million lawsuit against its founders. Livent never recovered.
Drabinsky and Gottlieb face up to 14 years in prison. A sentencing date is scheduled for April 8.
by J. Jennings Moss