Former Livent Execs In Court

Court proceedings against Livent Inc. co-founders Garth Drabinsky and Myron Gottlieb and two other former executives began January 10th in Toronto.

Onetime Broadway maverick Drabinsky and his co-defendants are charged with multiple counts of defrauding investors and creditors of more than $408 million over nine years, according to Bloomberg news service.

At its peak, Livent was North America’s biggest live theatre producer, with a stable of Tony award-winning hits including “Ragtime” and “Phantom of the Opera.”

But in 1998, Drabinsky left his CEO position, and former Walt Disney President Michael Ovitz bought an ownership stake in the company.

After Livent’s new management said it had discovered numerous accounting errors, Drabinsky and Gottlieb were suspended. The company filed for bankruptcy later that year and Canadian police began their investigation.

SFX Entertainment bought the company and most of its assets a year later for $98 million.

Drabinsky and Gottlieb have fought extradition to the U.S., where they were indicted for fraud in 1999. Canadian authorities charged the two, along with former execs Robert Topol and Gordon Eckstein, in October 2002, Bloomberg said.

The preliminary hearing in Toronto is scheduled to last until April, when the judge will decide if there is enough evidence to take the case to trial.