BUSINESS

An epic from Livent

Executive accuses Drabinsky of bullying ways

ANDREW CLARK March 1 1999
BUSINESS

An epic from Livent

Executive accuses Drabinsky of bullying ways

ANDREW CLARK March 1 1999

An epic from Livent

BUSINESS

Executive accuses Drabinsky of bullying ways

It was a simple motion in a small Toronto civil court. Yet the room was full of reporters waiting to hear David Roebuck argue on behalf of his client, theatre impresario Garth Drabinsky, that Livent Inc. be ordered to produce documents and to strike certain paragraphs from its $225-million lawsuit against the theatre company’s founder.

“They have not come to report on the particulars,” Roebuck said to Justice Robert Blair, referring to his audience. “They are here because that affidavit is still in your possession and until it leaves the court they can’t get at it.”

The document in question is the 60-page statement written by Robert Webster, Livent’s executive vice president since July and the man who oversaw a full review of the company’s financial records. In the affidavit, Webster chronicles allegations of widespread financial abuse, including $7.5 million in kickbacks to Drabinsky and Livent co-founder Myron Gottlieb and the keeping of two sets of financial books. Drabinsky and Gottlieb have denied such allegations, and they have

not been proved in court. But what really grabbed attention last week was Webster’s portrayal of a brutish working environment at Livent—a climate he alleges included executives who screamed and swore at staff and employees who were reduced to tears.

Webster, who joined Livent after it was taken over by the American investment team led by Hollywood agent Michael Ovitz, contends that mistreatment started with the company’s founder: “I had never before experienced anyone with Drabinsky’s abusive and profane management style.” Webster says the former chief executive officer insisted on approving numbers before they were given to Webster and accused him of tearing the company apart with his financial inquiries. “[Drabinsky] said that my work was of no use to him and that my role at Livent was, in his view, ‘to service his requirements’. He said he considered me to be failing in that capacity and, if I wanted to ‘sit in a corner and jerk off instead of servicing his needs, he would have to take action.”

Webster’s account is part of a six-volume,

1,500-page document fded in Ontario court on Feb. 12 as part of Livent’s lawsuit. It is culled from 140,000 pages of evidence that Livent’s new management gathered during an investigation that led the company to restate its finances. It is also based on testimony given by six former Livent employees, including former senior vice president Gordon Eckstein and Maria Messina, the former chief financial officer.

If Webster is to be believed, bullying and abuse were standard fare at Livent. He cites one case of an accounting employee leaving a meeting in tears, while another felt nauseated by the tension. He says the accounting staff “were repeatedly told to ‘shut up and do what they were told.’ ” Those who did not adhere to these demands were admonished. Webster says Messina was “shaking like a leaf’ the day after she left a memo for Drabinsky and Gottlieb saying she could not support the numbers for Livenf s first quarter of 1998.

Gottlieb, meanwhile, filed suit last week against Messina, Eckstein and four other former accounting staff. He says he relied on those employees for accurate financial records and that he is not an “expert in accounting practices.” Both Gottlieb and Drabinsky face a series of fraud-related charges in the United States, and U.S. authorities are seeking extradition, a process that could drag through the Canadian courts for years. To respond to the charges in Livent’s civil case, Gottlieb filed a statement of defence on Jan. 26 and Drabinsky is expected to do the same shortly.

During last week’s court appearance on that case, Roebuck questioned Livenf s use of “generic terms such as ‘separate set of ledgers.’ ” He said that in a trial, “I might say, ‘Yes, these other documents were mentioned, but you have misconstrued the purpose of those documents.’ If that is the defence, I’m entitled to know what he means by second set of books.” In addition, Roebuck charged that the 1,500 pages that Livent filed lacked relevance and were a misuse of court immunity. “Was it really necessary,” he asked the judge, “to state that Mr. Drabinsky told Mr. Webster to sit in a corner and do something that would cause Mr. Webster to go blind if done repeatedly?”

Blair did not grant Roebuck’s bid to inspect all 140,000 documents, but did strike some damaging phrases from the statement of claim against Drabinsky. Blair agreed that the Livent opus was “over-reaching and unnecessary” and placed Webster’s attacks against Drabinsky into the public realm.

In addition, the judge ordered Livent to pay Drabinsky $2,500, saying its “voluminous motion record” had cost the embattled theatre impresario the additional expense of another day in court. That may be the first cent Drabinsky has received from the company he founded in 1989 since he was suspended without pay in August.

ANDREW CLARK