The dashing of a development dream
Garth Drabinsky founds Cineplex Odeon, dabbles in producing live performances.
MCA purchases majority stock in Cineplex Odeon, examines books, and ousts Drabinsky for “accounting irregularities.” Drabinsky takes live-entertainment division with him and renames it Live Entertainment, later shortened to Livent, Inc.
August 3, 1995
Livent stock debuts on NASDAQ at $12 1/4 per share.
January 10, 1996
Drabinsky and Mayor Richard M. Daley announce plans to renovate the shuttered Oriental movie theater, with Livent and the city splitting the expected $30 million tab. The project will spearhead Daley’s cherished dream of reviving theater in the Loop. Drabinsky simultaneously plans to combine and renovate the old Lyric and Apollo theaters in New York. Responding to questions about criticism that he’s overexpanding, Drabinsky says, “I know more about building theaters than anybody in North America, and I know what I’m doing.” Livent stock price: 11 3/4.
April 24, 1997
Drabinsky and Daley announce the start of the Oriental renovation. The city condemns and acquires the neighboring Oliver Building to allow expansion of the Oriental’s stage, and will contribute another $13.5 million. Opening date moved back from spring 1998 to fall 1998. Livent stock price: 9 5/8.
July 20, 1997
The FBI is asking questions about the Oriental project as part of an ongoing investigation of Daley & George, Drabrinsky’s Chicago law firm, whose name partners are the mayor’s brother Michael and Drabinsky’s attorney John George. Drabinsky had agreed to pay $3.8 million for the theater, and when the city got involved it sent an appraiser to verify the price tag. But the appraiser also met with John George, after which he coincidentally arrived at just the right price for the building–$3.5 million to $4 million. Livent stock price: 11 5/8.
December 12, 1997
Livent’s newly renovated Apollo theater opens on Broadway. Livent stock price: 8 3/8.
January 18, 1998
Ragtime opens on Broadway. Livent stock price: 9 7/8.
January 25, 1998
Ragtime receives mixed review in the New York Times. Livent stock price: 8 3/4.
April 14, 1998
Michael Ovitz buys controlling interest in Livent for $20 million. Livent stock price: 10.
June 2, 1998
Livent reports a $20 million loss in the first quarter of 1998. Livent stock price: 8 1/8.
July 26, 1998
Vancouver production of Ragtime closes a month early. Livent stock price: 7 3/8.
August 10, 1998
Ovitz managing team examines Livent’s books and ousts Drabinsky for financial “irregularities.” Livent officials announce they may have to restate Livent’s financial reports for the last two years. Trading in Livent stock immediately suspended pending further financial information. Livent stock price: 6 3/4.
September 4, 1998
Law firm of Berger & Montague, PC, announces a class action lawsuit against Livent for violations of federal securities laws on behalf of persons who purchased Livent common stock between 5/15/96 and 8/7/98.
October 13, 1998
Gala ribbon-cutting ceremony opens the Oriental, renamed the Ford Center for the Performing Arts.
November 8, 1998
Ragtime opens to mixed reviews, some enthusiastic. The “I” in the giant electric “Oriental” sign is burned out. Trading in Livent stock still suspended.
November 18, 1998
Livent files for reorganization under Chapter 11 and attempts to arrange for new short-term financing. Livent terminates Drabinsky and cofounder Myron Gottlieb, files a $225 million (Canadian dollars) civil damage suit against them alleging “fraud, conversion, and unjust enrichment.” Restated financial statements increase loss for 1996, 1997, and the first quarter of 1998 from previously reported $44.7 million to $106.2 million. Also, Livent reports a net loss of $41.7 million for the second quarter of 1998. Livent stock trading still suspended.
November 20, 1998
Over-the-counter trading resumes on Livent stock in Toronto (it remains suspended on NASDAQ). Stock price per share plummets from 6 3/4 to 32 cents (US$). At end of the day stock is suspended again. Variety reports that Livent is seeking to sell the Oriental.
November 21, 1998
Mayoral spokesman tells Sun-Times that Livent is not returning City Hall’s phone calls, though Daley later backtracks on that statement.
November 27, 1998
New York Times reports that the Toronto Ford Centre for the Performing Arts is advising customers there not to purchase advance tickets to Ragtime because they may not receive a refund if the production closes early.
November 30, 1998
Livent obtains $25 million emergency loan and cuts 100 full-time and 270 part-time positions. Livent chairman Roy Furman issues statement that Livent will keep the Oriental open. Livent stock remains suspended. The “I” in the Oriental sign is still burned out.
Art accompanying story in printed newspaper (not available in this archive): photo by Lloyd DeGrane; Livent stock price graph.