Course:MGMT405 2023W2/Case-2ii

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The Collapse of Livent

Livent Inc.
Livent Inc. Logo
Industry: Entertainment
Company: Theatre Production
Status: Defunct
Opperated: 1990-1998
Located: Toronto, Ontario
Key Players: Garth Drabinsky (CEO, Co-Founder)

Myron Gottlieb (Director, Co-Founder)

Maria Messina (CFO)

Gordon Eckstein (Senior VP of Finance)

General Overview

Live Entertainment of Canada (or Livent Inc.) was a theatre production company based in Toronto, Ontario. Livent was founded as a division of Cineplex Odeon [1] by the former Cineplex executives Garth Drabinsky and Myron Gottlieb[1].

Through the 1990s, Livent saw success with award-winning productions in Toronto and on Broadway in New York. It produced famous musical performances such as Joseph and the Amazing Technicolor Dreamboat, Kiss of the Spider Woman, Show Boat and Ragtime [1].

Ultimately, it was disclosed that major accounting errors had been found in 1998 which lead the company to file for bankruptcy and dissolve with the sale of all assets in 1999.

Company Timeline

Time Event
1989 Drabinsky and Gottlieb are ousted from Cineplex Odeon Corp.[2]
1990 Livent Inc is founded by Drabinsky and Gottlieb using the live theatre assets taken with them upon their exit from Cineplex Odeon.[2]
1993 Livent Inc. went public on May 7, 1993, following, which the company's common shares were listed and posted for trading on the Toronto Stock Exchange (TSX).[3]

Kiss of the Spider Woman begins its run at the Broadhurst Theatre on May 3, 1993, and goes until July 1, 1995.[4]

1994 The Livent Inc. produced run of Showboat began at the Gershwin Theater on October 2, 1994 and ran until January 5, 1997.[5]
1995 On August 3, Livent common shares commenced trading on the NASDAQ.[3] Later Livent Inc. became the best-known mega-production and musical theatre in the industry.[1]
1997 A massive loss of $44.1 million occurred to Livent. Michael Ovitz, former Disney President joined the Livent board of directors as well as chairman of Livent's executive committee, invested $20 million and bought 12% of Livent's stake.[6]
1998 Due to internal struggle within Cineplex, Drabinsky and Gottlieb purchased the division for CAD 88 million.[7] Reproduced Livent Entertainment Inc. into Livent Entertainment of Canada Inc. Drabinsky was positioned as the Vice-Chairman and Chief Executive Officer of Livent Inc., and Gottlieb was positioned as the president and director.
1999 All assets are sold to an American-based company, SFX Entertainment of New York at $98 million (US), including all the theatres of rights to all production [1] and Livent is officially dissolved.

Accounting Irregularities at Livent

Early Warning Signs

Accounting irregularities and the related fraud are why Livent ultimately collapsed in 1998 but in one form or another they go back to the earliest years of operation before going public.

  • Livent was taken public in 1993. However, concerns already existed about the accounting practices. While working to provide a $45 million loan in 1992 RBC expressed to the then Senior VP of Livent that it was inappropriate how their accountants had been listing their preproduction costs separate from capital costs.[8] This practice was being implemented in an effort to understate costs and present a more profitable firm than Livent actually was.

Perpetration of Fraud

In the early days of Livent fraud occurred in the form of a kickback being pocketed by Drabinsky and Gottlieb.

  • From 1990 to 1994 they collude with some of their major vendors in construction for Livent productions. The vendors inflated prices so the company would overpay for services.
  • Funds were then returned directly to Drabinsky and Gottlieb or through King Commodity Services which was owned by Gottlieb.[9] [10]

Once publicly listed we see a much more detailed picture of how all the problems at Livent and exactly what was being done wrong by the leadership at the company. This period sees Drabinsky and Gottlieb meeting with senior management to discuss adjustments to be made to Livent financials.

  • From 1994 to 1998 we see effects of purposeful manipulation of the books at Livent to present lower losses and higher revenue.
  • Preproduction costs are allocated to fixed asset accounts which can be amortized over the course of forty years. This created lower annual costs than would have been presented if using the normal five-year period of amortization for preproduction costs.[11]
  • Livent internally used what they referred to as amortization and expense rolls. With these they were able to move amortization and expenses to subsequent periods from when they were incurred. By moving these they misrepresented current period financials to present a picture of higher profitability.[11]
  • Senior leadership at Livent would meet each quarter to review the initial financial information and then discuss the edits to be made. Members of the accounting department would then make the adjustments using their purposefully deceptive account practices for login expenses and send the new documents forward for another round of review.

Interestingly, in 1995 an investment analyst by the name of Alex Winch wrote a letter to Forbes in which he would suggest Livent was utilizing accounting methods to misrepresent the impact that high production costs were having on the firm. Livent would go on to sue Winch the following year and settle out of court but this case shows that some were able to note the warning signs with Livent earlier than others.[2]

Downfall of Livent

In the final year of operation Livent saw changes in leadership changes and the extent of the accounting irregularities came to light. Ultimately this brings about the end of the company though consequences for those involved will drag on for many more years.

  • In 1998 leadership was changing at Livent. The company took a significant write-down of $27 million on its investment in Show Boat. Soon after Drabinsky and Gottlieb leave their positions at the firm as Michael Ovitz makes a deal to invest $20 million which has him take control.
  • By August of 1998 Drabinsky and Gottlieb have fully been removed and KPMG is hired to conduct an audit for suspected financial irregularities. Mere months later in November, Livent filed for bankruptcy which is followed by a lawsuit filed against Drabinsky and Gottlieb for fraudulently manipulating the financial statements.[2]

The Perpetrators of Fraud at Livent

Key Players

Garth Drabinsky

Garth Drabinsky

  • Drabinsky was convicted of fraud related to the manipulation of financial statements at Livent in August 2008. He was sentenced to 7 years in prison.[12] [13]
  • He was implicated in five main illegal acts and they are as follows:
    1. Accounting Manipulations 1996-1997[11]
      • Transfer of preproduction costs: He transferred costs like advertising expenses for shows, into fixed asset accounts, such as the construction of theatres. This manipulation allowed Livent to depreciate these costs over an extended period, contrary to their actual shorter useful life.
      • Removal of Expenses from General Ledger: Under Drabinsky's directive, Livent removed certain expenses and related liabilities from the general ledger, effectively erasing them. These expenses would be re-entered in the following quarter, manipulating the financial results to appear more favourable.
      • Transfer of Costs Between Shows: Drabinsky transferred costs from shows that were currently running to another show yet to be opened or had longer amortization periods. This allowed Livent to reduce the immediate recognition of expenses
    2. Senior Management Directing the Manipulations
      • Drabinsky, along with other senior management, orchestrated these fraudulent manipulations.
      • They reviewed the financial results, agreed on the adjustments needed, and directed the accounting staff to make the adjustments appear as original entries.
    3. Falsification of Books, Records, and Accounts[11]
      • Under Drabinsky’s direction, the accounting team falsified Livent's books, records, and accounts to implement the fraud.
      • This involved changing invoice details, deleting original entries, and reposting fraudulent information.
      • This was all done with the aid of a specially written computer program to leave no trace of the manipulations.
    4. Lying to Auditors
      • Drabinsky and Gottlieb provided false management representation letters to the auditors.
      • They claimed that the financial statements were free of material errors and made according to GAAP.
      • This intentional deceit concealed the fraudulent activities from the auditors and regulatory bodies.
    5. Fraudulent "Revenue-Generating" Transactions 1996-1997
      • Drabinsky and Gottlieb recognized at least $34 million in revenue through transactions with side agreements that effectively rendered these transactions as loans.[11]
      • These undisclosed agreements violated GAAP and resulted in the fraudulent overstatement of revenues in Livent's financial statements.
Myron Gottlieb

Myron Gottlieb

  • Myron Gottlieb, who served his tenure at Livent as the director, was directly involved in fraudulent revenue transactions and false public filings.[13]
    1. Fraudulent Revenue Transactions[11]
      • Pace Theatrical Group [11] [14]
        • Negotiated and signed side letters that granted Pace rights to recoup fees plus profit, which were concealed from auditors.
        • Directed that side letters not be shown to auditors, hiding the true nature of transactions.
        • Affirmatively misrepresented transactions to auditors to support improper income recognition.
        • Falsely stated in representation letters that all liabilities and guarantees were recorded or disclosed.
        • This caused Pace to send misleading confirmation letters to Livent's auditors, falsely indicating compliance.
        • Fraudulently recognized revenue in financial statements, distorting the true financial health of Livent.
      • American Artists[11]
        • Concealed side letters from auditors that allowed American Artists to recoup its fees.
        • While Gottlieb was aware of the side agreements, he did not disclose them, violating transparency requirements.
        • Affirmatively misrepresented the transaction in the fiscal 1997 representation letter to auditors.
        • Contributed to Livent fraudulently recording approximately $5.8 million as revenue.
        • Misled stakeholders about the true nature of the transaction and Livent’s financial position.
        • The combination of events distorted the integrity of Livent's financial statements and misled investors.
      • Canadian Imperial Bank of Commerce Wood Gundy Capitals
        • In December 1997, Gottlieb negotiated the sale of an interest of production rights in the United Kingdom to the subsidiary CIBC Wood Gunty Capital for $4.6 million. In return, CIBC was entitled to royalty payments from shows. The contract also allowed Livent to repurchase the rights before June 30, 1998.[11]
        • On December 23rd, 1997, Gottlieb also negotiated side letters that provided mechanisms for CIBC to recoup fees and make profits. He kept the letters hidden from auditors. [11]
        • He concealed the true nature of the loan agreement from Livent's auditors.[11]
        • While Drabinsky manipulated the transaction, Gottlieb asked the managing director of CIBC, who had signed off on the transaction, to not disclose the side agreement to new management.
        • Gottlieb was able to repurchase the rights from CIBC.
    2. False public filings[11]
      • He filed Form 20-F with materially false and misleading financial statements for 1991-1994. For fiscal 1991, reported a pre-tax loss of $1.2 million instead of the actual $4.6 million.
      • For fiscal 1992, Gottlieb reported pre-tax earnings of $2.9 million, whereas the true earnings were approximately $100,000.
      • For fiscal 1994, he overstated preproduction costs by reporting $28 million instead of the actual $24 million.
      • For the fiscal 1995 annual report, overstated pre-tax earnings by approximately $3.5 million, reporting $18.2 million instead of the actual $15 million.
      • For fiscal 1995, he overstated preproduction costs by approximately $4 million, reporting $55.4 million.
      • In the fiscal 1996 annual report, he overstated pre-tax earnings by at least $34.5 million and reported earnings of $14.2 million instead of disclosing a loss of at least $20 million.
      • For fiscal1996, he overstated preproduction costs by approximately $4 million, reporting $75.6 million. Gottlieb also overstated fixed assets by at least $6 million, reporting $133.2 million instead of the actual $127 million or less.
      • For fiscal 1997, Gottlieb reported a pre-tax loss of approximately $62.1 million, which was understated by at least $21.4 million. He also overstated fixed assets by approximately $23.9 million, reporting $200.8 million instead of the actual $176.1 million or less.
Maria Messina, moments after testifying in court.

Maria Messina

  • Maria Messina acted as the Chief Financial Officer for Livent and was the former engagement partner for Livent's audit division( Deloitte and Touche).
  • Messina became implicit when she started joining the senior management meetings, where manipulations were directed and agreed upon, in October1997.
  • Messina signed the initial public offering registration with the U.S. SEC to raise U.S. $125 million knowing the accounting statements are manipulated.[15]
  • She directly prepared pre-and post-adjustment charts, that showed transferred amounts in detail for the meetings.[11] Messina failed to sustain a board of directors' ethics and accountability.
Gordon Eckstein leaving the court May 9, 2008.

Gordon Eckstein

  • Gordon Eckstein acted as the Senior VP of Finance at Livent. During his time with Livent Eckstein led accounting staff to misrepresent information in the financial statements.[16] Ultimately while Drabinsky and Gottlieb pushed for the fraud to be committed Eckstein was a key player in seeing that the fraud could be committed in the way that it was.
  • In 1999 Eckstein had pleaded guilty it the U.S. fraud charges and as part of his deal agreed to cooperate with the Canadian side of the investigation.[17]
  • In 2007 Eckstein went on to plead guilty to one count of fraud in Canada and was sentenced to two years of jail time.[17]
  • Going into 2008 representatives of Gottlieb still insisted that Eckstein had acted alone in perpetrating the fraud. However, witnesses stated that there was awareness of the manipulation by those reporting to Eckstein as well as his superiors during their time at Livent.[18]

Diane Winkfein and Grant Malcolm

  • Winkfein and Malcolm acted as senior controllers at Livent who reported to Gordon Eckstein. These two produced the general ledger for each year.
  • After the ledger was reviewed by senior management Winkfein and Malcolm then made adjustments. They also maintained the records to record any of the amortization and expense rolls used to log both to subsequent periods.[11]

Deloitte & Touche

Deloitte started auditing for MyGar Partnership (Myron and Garth Partnership) on 1989, December 31, later accounting for Livent's annual audit from 1992 to 1998[19].

  • On November 18, 1998, Livent issued restated financial statements, audited again by Deloitte for the years of 1996 and 1997. Restatement shows approximately $8,3000 difference loss from the pre-investigation financial statements.[19]
  • During the investigation, Livent alleged Deloitte for negligence in following the generally accepted auditing standards ("GAAS"), therefore, Deloitte should be responsible for auditor's negligence and it is not accountable for "clean audit opinions."[19]
  • Ultimately, the case of Deloitte & Touche v. Livent Inc. (Receiver of) would be brought forward nearly two decades later to assess liability.[20]
Snapshot of Livent's reconciled net income (loss) restatement for the years 1996 and 1997.

Other Players Involved:

KPMG and Robert Webster

  • Robert Webster, a former KPMG partner, was appointed as the Executive Vice President of Livent in late 1998. Webster spotted serious accounting irregularities in the company's financial records,[19] the board immediately started an investigation and suspended Drabinsky and Gottlieb from the company.
  • KPMG was appointed to conduct the investigation and restatement of the company's previous financial reports.[19] Peat Marwick from KPMG was retained to conduct independent investigation in Livent's accounting statement.[21]

PwC

  • PwC was appointed to conduct independent accounting advisory for the Audit Committee on the re-audit after Deloitte withdrew its clean audit opinions in respect of Livent's financial statements for the 1996 and 1997 fiscal years.[19]

Who Holds the Most Responsibility?

While many individuals were involved it seems clear to our team that Garth Drabinsky and Myron Gottlieb hold the most responsibility for the fraud that took place at Livent.

  • Both were leaders at Livent for the duration of the fraud being committed. They both had access to the information being altered and had hands in implementing the deceptive accounting practices that other key players worked on.
  • Importantly, they had the power to set the tone from the tone as both a CEO and a director. It was on them to cultivate a culture of ethical practices at Livent which they certainly do not appear to have done.

It really is important to place the blame on both of these men as a team. They were the founders, they were the leaders at Livent, and they ran this operation together. While each one had areas of more direct involvement the elements of their actions as outlined above came together to mislead investors who trusted the image of success that they created for Livent.

The Stakeholders Who Were Impacted

Michael Ovitz

  • In what would later become the final year of Livent's operation Michael Ovitz had made a deal to invest $20 million that would help him take control of Livent. Ultimately, given the level of misstatement in the financial documents Livent was forced to close and sell off all remaining assets.
  • Investors such as Ovitz became victims of the fraud being conducted by Livent's founders and lost what they thought were viable investments in the company.

The Investors

  • As a publicly listed company shareholders invested roughly $500 million into Livent.
  • Investments into Livent were made using inaccurate representations of the company's financial success.
  • If the company had presented itself honestly shares would have been priced more accurately and investors would not have lost as much as they ultimately did or possibly could have avoided investing in Livent alogether.
  • The scandal plummeted the stock price, tarnishing about 90% of investors' value per share.[21]

Deloitte & Touche

  • Deloitte & Touche was found liable for $85 million for its negligent audits of Livent's falsified financial statements in 1996 and 1997.[22] Deloitte is charged for negligence in obligating audit responsibility and upholding auditor ethics.[23]
  • The trial judge of the Supreme Court of Canada defined Deloitte's negligence into two dimensions, (1) Deloitte's approval of a 1997 press release and provision of a comfort letter; and (2) Deloitte's preparation and approval of the 1997 clean audit opinion.[24]
  • However, When brought to the Supreme Court of Canada in 2017 the case saw a partial appeal with damages being reduced to roughly $40 million.[25]
  • Considering the ruling of liability Deloitte's reputation and trustworthiness were damaged. Still, with how much time there was between the actual negligence and the consequences almost two decades later it is difficult to say how damaging it really was in the end.

CIBC

  • The bank suffered several hits to its reputation, goodwill, and trust from its customers
  • From reputational impact, followed financial impact as CIBC got sued by Livent's creditors for not foreseeing Livent's problem and its fraudulent partner.[26]

Court Cases and Testimonies

Multiple cases were brought forward as a result of the Livent Scandal. Two of them covered the actions by Drabinsky and Gottlieb then a later one covered the negligence on the part of the auditor for Livent.

U.S. Case Against Drabinsky and Gottlieb

The Justice Department and Securities and Exchange Commission filed charges against Drabinsky and Gottlieb in early 1999. These were charges for 16 counts of fraud and conspiracy which could have seen them liable for millions in fines as well as jail time investors.[9] [10]

Oddly, the charges never seem to have gone anywhere, with them still being outstanding as of 2009 and even later seeming to be dropped altogether in 2020.[27] [28] It is a strange circumstance but seems to have occurred simply to allow the Canadian case againts those to proceed with full attention.

Canadian Case Against Drabinsky and Gottlieb

The main case was against Drabinsky and Gottlieb for defrauding investors in Livent. The Royal Canadian Mounted Police filed charges for 19 counts of fraud and falsifying financial statements in October 2002.

Over the course of the Canadian cases the following major consequences occurred:

  • In 2007, the court ordered Drabinsky and Gottlieb were ordered to pay $36.6 million to the owners of Livent's Debt.[9]
  • In 2009, Drabinsky and Gottlieb were found guilty for two counts of fraud and one for uttering forged documents.[9] As a result, Drabinsky was sentenced to seven and Gottlieb to six years in jail.[29] These sentences were later reduced to five and four respectively.[29]

Defense for Garth Drabinsky

As lawyer for Garth Drabinsky during the case, Edward Greenspace argued in defence of his client.

  • When cross-examining Messina, Greenspace accused her of being a massive fraud, and an active(not passive participant) perpetrator of the scandal.[30]
  • He accused Messina of committing perjury to avoid facing more charges related to hiding the fraud at Livent for a longer period of time.[31]
  • During the court case, Greenspace used Messina's past relationship with a former worker at Deloitte, to accuse her of having a relationship with Eckstein, making her an unreliable witness.[30]
  • He pled not guilty for his client, Drabinsky, claiming the client was not aware of the scandal.[32] [30] [13]

Maria Messina's Testimony

Messina went on to testify against Drabinsky and Gottlieb as a whistleblower.

  • She became aware of plans to implement over $20 million in accounting manipulations and urged reconsideration, which was dismissed as not her concern.[33]
  • She testified against the dictatorship work environment of the CEO's management style. She claimed that the CEO would often fly into a rage, discouraging any employees from going up against him.[33] [30]
  • She highlighted the pressure that the CEO put on herself and other accounting staff to participate in fraudulent accounting practices.[33]
  • She accused Livent of hiring pushovers, making it easier to cover up accounting malpractices.[34]
  • She came out in the court case as the whistleblower, working in conjunction with the new management.[34]

Canadian Case Against Deloitte & Touche

Separate from the perpetrators of the fraud Deloitte also had a case brought against it for negligence during its audits of Livent's financial statements. They were found guilty of negligence in conducting audits of Livent though the damages they owed would later be reduced.

The results were as follows:

  • As a result of negligence in auditing and breaching the duty of care in raising red flags to Livent's fraudulent accounting statements, Deloitte received an order from the Ontario judge to pay damages of $84.7 million to Livent's creditors.[35]
  • In 2017, the trial judge of the Supreme Court of Canada investigated and reassessed Deloitte's responsibility for negligent performance in auditing, and Deloitte's liability of $40 million in damages.[31]

Consequences and Aftermath

Livent Inc.

The following events took place after the discovery of the fraud at Livent:

  • Livent released corrected financial statements.
  • Livent Inc. and its U.S. subsidiaries filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The company cited debts of up to $334 million.[36] [37]
  • Livent Inc. entered into a court case against Deloitte and Touche, their auditors. Livent blamed their auditors for their negligence in the scandal.[38] [39]
  • Livent company stocks fell to a share price of 50 cents. In August 1999, Livent Inc assets were sold for an estimated US$97 million, signalling the liquidation and the end of the company.[40]
  • Nasdaq and the TSX immediately suspended Livent's trading after the discovery of accounting irregularities. Livent's stock plummeted over 95% from U.S. $6.75 per share to approximately $0.28 cents per share and lost over U.S. $100 million in market capitalization.[21]
    Livent stock crash. US$6.75 to US$0.28 per share
  • Ultimately, in August 1999, Livent Inc assets were sold for an estimated US$97 million, signalling the liquidation and the end of the company.[40] [41] This will mark the end of Livent Inc.

In the end, Livent ceased to exist as a direct result of unethical practices by leadership. The Livent Scandal shows the terrible outcome that can result from fraudulently altering financial information. Despite all the efforts to present a successful company reality still caught up to Livent and the consequences for misleading the investors ultimately came back to those who remained after the company was gone.

Garth Drabinsky

After the Livent scandal, Garth Drabinsky's major developments include:

  • On August 10, 1998, Drabinsky and Gottlieb were suspended from the Livent executive. Following a $225 million lawsuit to recover the damage from accounting irregularities.[42]
  • In 2002, The RCMP charged Drabinsky and Gottlieb with fraud for falsifying accounting statements and deceiving the company performance of its investors and creditors.[42]
  • In 2007 Drabinsky and Gottlieb were ordered by an Ontario court to pay $36.6 million USD to the owners of Livent's debt.[9]
  • In 2009 he was sentenced to 7 years in jail. His sentence for fraud and forgery was later reduced to 5 years by the Ontario Court of Appeal.
  • Drabinsky, Gottlieb, and Eckstein are banned for court cases serving as a director or officers of a public company by the Ontario Securities Commission after Court case litigation and charges.
  • He continued his career in the entertainment industry through Tiberius Entertainment (which later was called Garth H. Drabinsky Production.[43] After promoting the film Barrymore at the Toronto International Film Festival, Drabinsky then partnered with former CBC executive Richard Stursberg to raise funds for two musicals.[44]
  • In 2022, he received a Tony Award nomination for Best Musical for "Paradise Square."[45]
  • In 2022, Actors' Equity placed Drabinsky on a "Do Not Work With" list, effectively banning him from producing future Broadway shows. This was due to cast members and stage managers speaking out against poor working conditions and unpaid benefits.[46] [47]
  • In 2023, Drabinsky filed three defamation lawsuits against American Actor’s Equity for placing him on their ‘Do Not Work’ list, all of which were dismissed.[46] [47]

Overall, we can see that there was a significant delay between the 1998 charges and the actual sentencing in 2009. Even after jail time though Drabinsky was able to stay involved in entertainment. Consequences were certainly there for the actions he took but those alone do not seem to have been able to keep him away from this industry for the long term.

Myron Gottlieb

Following his removal from Livent Myron would also be caught up with the consequences of his actions.

  • As previously mentioned Gottlieb was charged alongside Drabinsky for fraud by the RCMP.[42]
  • Gottlieb is prohibited from serving on a board as a director or officer for life time.[40]
  • He is also prohibited from trading securities outside his registered retirement savings for 15 years.[40]
  • As noted above, in 2007 him and Drabinsky were ordered to pay U.S. $36.6 million for Livent's debt.[9]
  • He was then convicted of fraud in 2009 and sentenced to 6 years in jail.[29]

Less can be found about Myron after his jail time which would seem to imply that the consequences for his actions have stuck and kept him from working with other companies with a similar level of responsibility as he had at Livent.

Maria Messina

Maria Messina faced three main consequences, despite testifying against Drabinsky and Gottlieb.[34] She pled guilty to one count of violating U.S. securities laws, acknowledging making false statements about Livent's financial results.[32]

  • She was fined $7,500 dollars.[33]
  • She had her license suspended for two years.[48]
  • She was relieved of her duties, avoiding prison sentence.[49]

Deloitte

Deloitte is an interesting play in terms of consequences in that it really does not seem to be as hurt. While found at least partially liable for negligence the consequences and payment of damages aren't until long after the actual breach of their duty of care.[31] [35]

  • In terms of tangible consequences, Deloitte was forced to pay damages of $40 million.
  • Beyond this though its hard to assess the damage to reputation that this could have by the time they were found liable in 2014 and when they were later reduced in 2017.

These factors as well as the length of time it took for others to see consequences shows how slow justice seemingly was in terms of holding the key players accountable for their actions.


References

  1. ↑ 1.0 1.1 1.2 1.3 Charlebois, Gartan (December 11, 2016). "Livent". Canadian Theatre Encyclopedia.
  2. ↑ 2.0 2.1 2.2 2.3 "Livent Timeline". National Post. May 3, 2008. Retrieved March 10, 2024.
  3. ↑ 3.0 3.1 "OSC Bulletin" (PDF). The Ontario Securities Commission. 24 (27): 3983. July 6, 2001.
  4. ↑ IBDB. "Kiss of the Spider Woman". Internet Broadway Database. Retrieved March 25, 2024.
  5. ↑ IBDB. "Showboat". Internet Broadway Database. Retrieved March 25, 2023.
  6. ↑ Bates, James (April 14, 1998.). "Ovitz back in the spotlight with stake in Livent". Los Angeles Times. Check date values in: |date= (help)
  7. ↑ Weber, Bruce (November 1, 1994). "Canadian Showman Takes On Broadway With a Swagger". The New York Times.
  8. ↑ Brieger, Peter (May 21, 2008). "Former Livent VP outlines accounting; Gordon Eckstein". National Post. Retrieved March 17, 2023.
  9. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 Lokanan, Mark (September 2014). "How senior managers perpetuate accounting fraud? Lessons for fraud examiners from an instructional case". Journal of Financial Crime. 21: 411–423 – via ResearchGate.
  10. ↑ 10.0 10.1 MARRERO, District Judge. (June 29, 2001). "In re Livent, Inc. Securities Litigation". Case Text. Retrieved March 26, 2024.
  11. ↑ 11.00 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 Katz, Jonathan (January 13, 1999). "Livent.Inc". U.S SECURITIES AND EXCHANGE COMMISSION. Archived from the original on January 13, 1999. Retrieved March 1, 2024.
  12. ↑ Posner, LIVENT SCANDAL FRAUD CONVICTION: THE IMPRESARIO STRIKES BACK: DISGRACED DRABINSKY PLOTS HIS RETURN TO THE THEATRE (December 4, 2006). "The Globe and Mail". The Globe and Mail. Retrieved March 10, 2024.
  13. ↑ 13.0 13.1 13.2 "Livent co-founders found guilty of fraud, forgery". CTV News. March 25, 2009.
  14. ↑ Pogrebin, Robin (November 28, 1998). "For Livent, Bankruptcy Is Proving To Be Severe". The New York Times. Retrieved March 20, 2024.
  15. ↑ "Maria Bernadette Messina: Summary, as Published in CheckMark" (PDF). CPA Ontario. 2000.
  16. ↑ Alexander, Posadzki (May 22, 2015). "Gordon Eckstein, key player in Livent fraud scandal, reaches OSC settlement". The Canadian Press. Retrieved March 17, 2023.
  17. ↑ 17.0 17.1 Mills, Don (February 7, 2007). "Former Livent executive pleads guilty to fraud: Gordon Eckstein". National Post. Retrieved March 11, 2024.
  18. ↑ Surridge, Grant (July 18, 2008). "Livent co-founder's lawyer points finger at former VP; Witness says Gordon Eckstein didn't act alone". The Vancouver Sun. Retrieved March 19, 2023.
  19. ↑ 19.0 19.1 19.2 19.3 19.4 19.5 Ontario Superior Court of Justice (April 4, 2014). "Livent Inc. v. Deloitte & Touche LLP". CanLII.
  20. ↑ CPA Canada. "Livent decision and the profession". Chartered Professional Accountants of Canada. Retrieved March 23, 2023.
  21. ↑ 21.0 21.1 21.2 SEC (January 13, 1999). "Livent Inc". U.S. Securities and Exchange Commission.
  22. ↑ Karabus, Matthew; Na, Benjamin (May 01, 2014). "The increasing scope of auditors' negligence: Livent Inc. v. Deloitte & Touche LLP". Gowling WLG. Check date values in: |date= (help)
  23. ↑ Hasselback, Drew (April 6, 2014). "Livent auditor Deloitte ordered to pay $84.8-million for failing detect fraud". Financial Post. Retrieved March 20, 2024.
  24. ↑ "Deloitte & Touche v. Livent Inc. (Receiver of)". Supreme Court Judgements. December 20, 2017.
  25. ↑ SCC (December 20, 2017). "Deloitte & Touche v. Livent Inc. (Receiver of)". SUPREME COURT OF CANADA. Retrieved March 24,2024. Check date values in: |access-date= (help)
  26. ↑ "Livent creditors sue CIBC". CBC News. July 12, 2000. Retrieved March 22, 2024.
  27. ↑ CBC News (March 25, 2009). "Livent co-founders Drabinsky, Gottlieb convicted of fraud and forgery". CBC News. Retrieved March 26, 2023.
  28. ↑ McFarland, Janet (July 13, 2018). "U.S. dismisses case against Canadian theatre producer Garth Drabinsky in Livent Inc. affair". The Globe and Mail. Retrieved March 25, 2024.
  29. ↑ 29.0 29.1 29.2 Shecter, Barbara (September 5, 2014). "Livent co-founder Myron Gottlieb reaches proposed settlement with OSC". Financial Post. Retrieved March 25, 2024.
  30. ↑ 30.0 30.1 30.2 30.3 Kari, Shannon (June 22, 2008). "Greenspan accuses Livent finance chief of 'massive fraud'". National Post. Retrieved March 20, 2024.
  31. ↑ 31.0 31.1 31.2 McFarland, Janet (June 23, 2008). "Former Livent CFO spun fraud story, defence suggests". The Globe And Mail. Retrieved March 20, 2024.
  32. ↑ 32.0 32.1 Clark, Andrew (March 17, 2003). "Drabinsky Charged". The Canadian Encyclopedia. Retrieved March 20, 2024.
  33. ↑ 33.0 33.1 33.2 33.3 "If You Don?t Hit the Numbers You?re Fired!!!". Haywood Hunt & Associates Inc. May 27, 2020. Archived from the original on |archive-url= requires |archive-date= (help). Retrieved March 20, 2024.
  34. ↑ 34.0 34.1 34.2 Courts Bureau, Peter Small (July 8, 2008). "Hires lacked confidence, Livent trial told". TORONTO STAR. Archived from the original on |archive-url= requires |archive-date= (help). Retrieved March 20, 2024.
  35. ↑ 35.0 35.1 Hasselback, Drew (April 06, 2014). "Livent auditor Deloitte ordered to pay $84.8-million for failing detect fraud". Financial Post. Check date values in: |date= (help)
  36. ↑ "Livent board injects cash into troubled company". CBC News. November 23, 1998. Retrieved March 20, 2024.
  37. ↑ Wilson-Smith, Anthony (March 17, 2003). "Drabinsky-Livent Suits". The Canadian encyclopedia. Retrieved March 21, 2024.
  38. ↑ "Deloitte liable for some, but not all, of Livent's 1990s losses, top court rules". CBC News. December 20, 2017. Retrieved March 20, 2024.
  39. ↑ Gupta, Ankita (October 1, 2018). "Deloitte & Touche v Livent Inc.: A New Duty of Care for Auditors". the court.ca. Retrieved March 21, 2024.
  40. ↑ 40.0 40.1 40.2 40.3 The Canadian Press (February 22, 2017). "Curtain call: A look at key events in the Livent Entertainment fraud scandal". City News Everywhere. Retrieved March 19, 2023. Cite error: Invalid <ref> tag; name ":21" defined multiple times with different content
  41. ↑ L.A. Times Archives (June 2, 1999). "SFX Entertainment to Acquire Livent Assets". Los Angles Times. Retrieved March 25, 2024.
  42. ↑ 42.0 42.1 42.2 The Canadian Press (February 22, 2017). "Curtain call: A look at key events in the Livent Entertainment fraud scandal". Toronto City News.
  43. ↑ Knelman, Martin (February 20, 2013). "Garth Drabinsky on day parole after 17 months in jail". TORONTO STAR. Retrieved March 20, 2024.
  44. ↑ Knelman, Martin (December 21, 2014). "Garth Drabinsky prepares for Act 3". TORONTO STAR. Retrieved March 20, 2024.
  45. ↑ "A Second Act for Garth Drabinsky?". Wikipedia. March 20, 2024. Retrieved March 20, 2024.
  46. ↑ 46.0 46.1 Huston, Caitlyn (July 14, 2022). "Actors' Equity to Add Producer Garth Drabinsky to "Do Not Work" List After 'Paradise Square' Cast Speaks Out (Exclusive)". The Hollywood Reporter. Retrieved March 20, 2024.
  47. ↑ 47.0 47.1 Jones, Kenneth (March 29, 2012). "Convicted Producer Garth Drabinsky's Appeal Won't Be Heard by Canadian Supreme Court". Playbill. Retrieved March 20, 2024.
  48. ↑ "Maria Bernedette Messina: Summary, as Published in CheckMark" (PDF). CPA Ontario. March 20, 2024.
  49. ↑ "Livent Fires CFO, 4 Others on SEC Advice". Los Angeles Times. December 18, 1998. Retrieved March 20, 2024.
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