Livent admitted in 1998 that it had used fictitious sales to inflate revenue.
Livent was a Toronto-based theatrical production company founded by Garth Drabinsky and Myron Gottlieb. It produced major stage shows including The Phantom of the Opera in Canada and Ragtime. Behind the successful productions, executives manipulated accounting records and concealed financial problems.
The company disclosed accounting irregularities in 1998 and filed for bankruptcy protection soon afterward. Investigators found that Livent had recorded fictitious revenue, shifted costs between productions, and used other methods to make its financial position appear healthier. The company’s collapse became one of Canada’s most prominent corporate fraud cases of the era.
Drabinsky and Gottlieb were later convicted in Canada of fraud and forgery. The scandal is sometimes confused with the Bre-X mining fraud, but Livent concerned theatrical finances and production accounting rather than a fabricated gold discovery.