Warrants Out For Livent Founders

Arrest warrants were issued Thursday for the founders of Livent Inc., the Canadian-based Broadway theater company known for such lavish productions as Ragtime and Kiss of the Spider Woman.

Garth Drabinsky and Myron Gottlieb had been ordered to appear in U.S. District Court in Manhattan on Thursday for an arraignment on 16 counts of fraud and conspiracy. They are accused of inflating corporate earnings and scheming to hide massive financial losses for eight years.

Both men issued statements Wednesday from Toronto that nothing short of an extradition process would get them to appear in a U.S. court.

The arrest warrants are only valid in the United States, meaning that the two defendants can only be arrested if they return to this country. Both live in Toronto.

U.S. Attorney Mary Jo White has said she would file documents in Canadian courts to extradite them. As of Thursday afternoon, the process had not yet been started.

Drabinsky and Gottlieb are accused of stealing $4.6 million from the Toronto-based company. In addition to the criminal charges, the Securities and Exchange Commission has accused the men in a lawsuit of siphoning money for themselves by inflating invoices paid to vendors, then doctoring the company's books to make it appear profitable when it was not.

Drabinsky, Livent's former chairman and chief executive, and Gottlieb, its former president, allegedly had a senior vice president, Gordon Eckstein, write off most of the $4.6 million as pre-production expenses. The pair allegedly pocketed the money.

The alleged fraud was revealed last August after a new management team headed by former Walt Disney Co. President Michael Ovitz discovered irregularities that cost Livent and its shareholders $60 million. Drabinsky and Gottlieb were fired in November.

Eckstein and Maria Messina, Livent's chief financial officer from mid-1996 through November, each pleaded guilty in recent weeks to federal criminal charges. No sentencing date was set.

Five others also were charged by the Securities and Exchange Commission with engaging in pervasive accounting fraud beginning in 1990.

Livent has sought court protection from creditors in Canada and the United States. It has obtained $25 million in emergency financing to survive for another six months while it restructures its operations.

Livent owns or controls four theaters in New York, Chicago, Toronto and Vancouver.

Drabinsky has proclaimed his innocence and denounced U.S. authorities for conducting a "quick, ill-conceived" investigation.

Written By Donna De La Cruz, Associated Press Writer