How far the mighty fall….Garth Drabinsky was an entertainment mogul in the world of theatre, whose productions including Phantom of the Opera, Showboat, Sunset Boulevard, and Kiss of the Spider Woman, garnered nineteen Tony awards for Drabinsky’s production company Livent. Prior to his foray into live theatrical production, he was an independent film producer, and later with a partner co-founded Cineplex Theatres in Canada in 1979, eventually acquiring Odeon Theatres to establish Cineplex Odeon, a venture he was forced out of in 1989 after accumulating unmanageable debt.
Born in Toronto, he obtained a law degree from the University of Toronto in 1973 and was called to the Ontario bar in 1975, working briefly as an entertainment lawyer, but his legal credentials paled in comparison to his success in show business. He became a Broadway darling, said to be responsible for 25% of North America’s live theatre revenues. Along the way he received a Queen’s Counsel designation, the prestigious Order of Canada, took Livent public, and appeared to be at the top of his game.
But things aren’t always as they seem. The reality was that Drabinsky was awash in financial problems due to excessive production costs, along with millions of dollars expended to build or renovate venues for his productions. To the surprise of many, in 1998 Livent received a $20 million dollar injection from Michael Ovitz, co-founder of Creative Artists Agency, the world’s largest talent agency and later President of Walt Disney Corporation.
With new money Drabinsky was on a roll, that is until forensic auditors hired by Michael Ovitz discovered that Drabinsky and his partner Myron Gottlieb were “cooking” the books in order to hide their massive financial losses. In this case, they created two sets of books, one that painted a rosy picture and the second that revealed the stark reality of their nearly bankrupt company.
These events saw the dismissal of Drabinsky and Gottlieb from Livent in August of 1998 and the commencement of a $225 million dollar civil lawsuit against them. But worse things were down the pike.
In 1999 authorities in New York indicted Grabinsky and Gottleib accusing them of misappropriating $4.6 million dollars from Livent. Meanwhile the Royal Canadian Mounted Police and securities regulators in the United States and Canada began investigating.
Finally, in 2002 four Livent executives, including Drabinsky and Gottlieb, were charged with fraud and accounting irregularities between 1989 and 1998. The allegations were ugly: forged financial statements, Livent purchasing large blocks of theatre tickets to falsely create an “uber-successful” production, and enticing investors to inject over $500 million dollars into the company based on fake documents.
After years of delay, said to arise from Garth Drabinsky’s lawyer, Eddie Greenspan, being fully occupied by the Lord Conrad Black fraud case in Chicago, Drabinsky finally faced justice. After a 65 day trial, Drabinsky was found guilty and sentenced to a seven-year prison term, which ultimately after appeal, was reduced to five years.
Recently steps were taken by the Canadian government to rescind his Order of Canada, and last week the Law Society of Upper Canada disbarred him, despite glowing reference letters from former Prime Minister Brian Mulroney and former Justice of the Supreme Court of Canada, Frank Iacobucci.
Has Garth Drabinsky taken responsibility for his crimes? Sort of, but he still says that the fraud was a result of computer software that he didn’t understand.
Lawdiva aka Georgialee Lang