TORONTO (AP) - Former Broadway theater producers Garth Drabinsky and Myron
Gottlieb pleaded not guilty Monday to participating in a large-scale accounting
fraud.
They are charged with two counts of fraud and one count of forgery. The
trial began Monday in Ontario Superior Court in Toronto.
The two co-founded Livent, one of the major Broadway theater companies in
the 1990s, that produced hit shows such as "Ragtime" and "Showboat."
Prosecutor Robert Hubbard said he will call seven former Livent employees to
testify that their former bosses falsified financial statements and had their
accounting software modified to inflate income.
In one case, the pair took a kickback from an engineer for work he did not
do, prosecutors say.
Authorities allege that the manipulation of the books helped to build $100
million shareholder value that was lost when the fraud was revealed after a new
management team headed by former Walt Disney Co. President Michael Ovitz
discovered the irregularities.
Drabinsky and Gottlieb were fired and Livent filed for bankruptcy protection
in 1998.
The U.S. Securities and Exchange Commission called it a "pervasive
eight-year fraudulent accounting scheme."
The two are also charged in the U.S but they've fought extradition and that
case remains on hold.
Livent owned or controlled theaters in New York, Chicago, Toronto and
Vancouver. Its other productions included "Barrymore," "Phantom of the Opera,"
and "Fosse."
Its Broadway productions have won numerous Tony Awards.
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