Livent trial revelations: Cooked books rooks schnooks

Posted on May 15, 2008 by Douglas Bell

He’s a lot taller, rather more phlegmatic, and considerably more fragrant (having applied substantial splashes of eau de something), but Livent’s former VP finance Gordon Eckstein had about him more than a whiff of David Radler when he walked into court yesterday to testify against his erstwhile bosses Garth Drabinsky and Myron Gottlieb. The examination—in chief carried out with brisk efficiency by the Crown’s lead prosecutor, Robert Hubbard—directed Eckstein to tell the court that though he was the one who cooked Livent’s books, he did so at the behest of Drabinsky and Gottlieb (both of whom were sitting not 20 feet away).

Eckstein testified that he helped create a deceptively rosy financial picture that led investors to pour hundreds of millions of dollars into Livent throughout the 1990s. “They [Drabinsky and Gottlieb] absolutely knew that the numbers were false,” said Eckstein, just before Hubbard led him through a recitation of the financial rewards that his bosses accrued as a result: shareholdings in the tens of millions of dollars (this as opposed to Mr. Eckstein’s somewhat more meagre allocation, worth $79,000).

Time after time, in closing out each chapter of the story, Hubbard asked Eckstein the same question: “Did you know what you were doing was wrong?” And each time he offered the same answer in a clear, unwavering baritone, once even looking directly at the accused: “Yes.”

As the morning wore into early afternoon, things grew tetchy between Hubbard and the Greenspans. The latter began to object more frequently to what they felt was Hubbard’s leading of the witness. At one point, Eddie lightened the atmosphere by noting that Hubbard had upset him so much that “I just broke my chair,” to which Hubbard responded, without missing a beat, “You might need a couple of chairs in the course of this trial.”

Another moment of low comedy arrived with the appearance of former Livent director and executive VP Robert Topol. He appeared in the gallery, of course, since his criminal charges in the matter were stayed by a superior court judge citing undue delay. An avowed supporter of the accused, Topol was rapidly ushered out, with both the prosecution and the defence alerting the judge to his removal owing to an “abundance of caution” (he could be called as a witness).

A number of members in the press gallery noted Topol’s presence and insouciant air (it was unmissable—he made himself rather comfortable). One journo even suggested that since the delays leading to the dismissal of his charges were a result of the Crown’s accommodating Eddie Greenspan’s schedule, “the guy ought to be sending Conrad Black flowers once a month.”

• Eckstein ordered to cook Livent books, court hears [National Post]
• Changes were made to Livent financial statements: witness
• Ex-COO watches trial from safe seat [National Post]
• Former executive testifies he told Livent to clean up the books [Globe and Mail]

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