Several charges against Drabinsky dropped
Crown prosecutors have dropped several criminal charges against Garth Drabinsky, who faces allegations of fraud at former theatre company Livent Inc.
Mr. Drabinsky and his long-time partner Myron Gottlieb were charged in 2002 with 19 counts of fraud related to the collapse of Livent. Two other former Livent executives were also charged. They all pleaded not guilty and were released on bail.
Earlier this year, three of the charges were dropped after a three-month preliminary hearing. In April, Mr. Drabinsky, Mr. Gottlieb and the others were committed to stand trial on the remaining charges.
No trial date has been set, but it's not expected to start until the spring of 2007. That would be nearly 10 years since Toronto-based Livent filed for bankruptcy protection in Canada and the United States citing allegations of a $97-million (U.S.) fraud. None of those allegations have been proven.
According to an indictment filed in Ontario's Superior Court, two of the dropped charges related to allegations the group defrauded Royal Bank of Canada and the Bank of Nova Scotia. Those banks were among Livent's largest lenders. Royal initially extended a $60-million (Canadian) line of credit to the company in 1989, but the amount was adjusted to about $46.5-million by 1993. Scotiabank established a $20-million line of credit for the company in 1994.
The third dropped charge related to allegations they defrauded Allen & Co., a New York-based investment firm, out of $800,000 (U.S.).
"The crown [counsel], having reviewed the evidence of the preliminary hearing when he drafted the indictment after committal for trial, he exercised the discretion and chose not to proceed with certain charges," said Brian Greenspan, a lawyer representing Mr. Gottlieb. "Those were reasonably significant allegations that are not being proceeded with."
Crown counsel Graeme Cameron declined to comment and there is no explanation in the indictment for the reduced charges. Typically, the crown proceeds with a charge only if it believes that there is a reasonable prospect of conviction.
At its peak, Livent was one of the largest live theatre companies in North America, with more than $330-million (Canadian) in annual revenue from theatres in Toronto, Vancouver, Chicago and New York.
In the summer of 1998, just after Hollywood super agent Michael Ovitz took control of Livent, a small group of insiders raised questions about the company's finances. The group brought its concerns to the attention of the new owners, who removed and sued Mr. Drabinsky and Mr. Gottlieb. The two men denied any wrongdoing and countersued, alleging that if there were any improprieties they were committed by others at the company. Most of Livent's assets were sold to SFX Entertainment Inc. of New York.
Mr. Drabinsky and Mr. Gottlieb were among a group of former company executives charged with fraud in the United States over the collapse of Livent. Two of those, former chief financial officer Maria Messina and former senior vice-president of finance Gordon Eckstein, pleaded guilty to one count each.
Mr. Drabinsky and Mr. Gottlieb have denied any wrongdoing in that case, which is believed to be on hold pending the outcome of the Canadian case.
