Beginning in 2002, Drabinsky dabbled for a few years with the Toronto-based film production and direct marketing company, Visual Bible International Inc.. Although he and Livent co-founder Myron Gottlieb were both purported to be creative consultants to the company, they were instrumental in building VBII's business model and trying to find an American executive to serve as President and CEO to serve as a mouthpiece to Wall Street. They were indeed running the company behind the scenes as fugitives from American prosecutors. One executive who was recruited by the executive search firm Korn Ferry and offered the position, Stuart Hotchkiss, a former Time Inc. executive, declined the job after learning about Drabinsky's and Gottlieb's legal woes and being told by then company Chairman and Toronto dentist, Dr. Steven Small, that he would not be able to fire either consultant should the need arise. VBII was put into receivership by an Ontario court in 2005. Drabinsky is still active in the Canadian entertainment industry, through Tiberius Entertainment. In 2011, it promoted the film Barrymore at the Toronto International Film Festival, based on the play with Christopher Plummer. Drabinsky is now partnering with former CBC executive Richard Stursberg to raise funds for two musicals. Drabinsky closed Sousztaka after receiving bad reviews.
Livent insolvency and subsequent proceedings
In November 1998, Livent sought bankruptcy protection in the US and Canada, claiming a debt of $334 million, and securities regulators in both Canada and the US began investigating Livent's books.
Canadian proceedings
On March 25, 2009, Drabinsky and Livent co-founder Myron Gottlieb were found guilty of fraud and forgery in Ontario Superior Court for misstating the company's financial statements between 1993 and 1998. Drabinsky was sentenced to seven years in jail on August 5, 2009 for his role in the case. Drabinsky filed an appeal in the Ontario Court of Appealwith respect to his sentence on September 3, 2009. During that appeal, he remained free on bail. On September 13, 2011, the Court of Appeal, while upholding the convictions, reduced Drabinsky's sentence to 5 years. Drabinsky applied for leave to appeal to the Supreme Court of Canada, and the application was dismissed without costs on March 29, 2012. Drabinsky was originally held at Millhaven Institution, for assessment. In December 2011, he was transferred to serve out his sentence at Beaver Creek Institution, a minimum security prison, located in Gravenhurst, Ontario, and was released on day parole in February 2013. Drabinsky was granted full parole on January 20, 2014. Administrative proceedings were initiated against Livent, Drabinsky and others by the Ontario Securities Commission in 2001, and they were suspended in 2002 until all outstanding criminal proceedings had been completed. In February 2013, the OSC announced that hearings would take place on March 19, 2013, in the matter. Myron Gottlieb and Gordon Eckstein, who were the other parties in the proceedings, subsequently entered into settlement agreements with the OSC in September 2014 and May 2015 respectively. In 2017, the Ontario Securities Commission permanently banned Drabinsky from becoming a director or officer of any public company in Ontario. The OSC also prohibited him from acting as an investment promoter, and banned him from trading securities.
US proceedings
In January 1999, Livent reached an administrative settlement with the Securities and Exchange Commission, while civil and criminal proceedings were simultaneously pursued against Drabinsky, Gottlieb and certain other former Livent employees. In 2005, former investors in Livent corporate bonds won a $23.3 million settlement against Drabinsky and Gottlieb in the United States District Court for the Southern District of New York, for which enforcement of the judgment was upheld by the Ontario Court of Appeal in 2008. On June 25, 2019, legal authorities in New York dismissed all outstanding criminal charges against Drabinsky with prejudice. Assistant United States attorney, Sarah Eddy, said the dismissal is appropriate because Mr. Drabinsky had already been prosecuted in Canada for the fraud. While the outstanding charges had been dormant for many years, they impeded Mr. Drabinsky from being able to travel to the United States, for fear of extradition. Drabinsky is now free to travel to-and-from the United States, and has been doing so frequently while working on his new musical, Paradise Square.
Disbarment
On July 17, 2014 Drabinsky was disbarred by the Tribunal of the Law Society of Upper Canada for unbecoming conduct, having been found guilty of defrauding the public and forging certain financial statements. The Tribunal's order, effective immediately, revoked his licence to practice law in the province of Ontario.
On November 29, 2012, Governor GeneralDavid Johnston signed an Ordinance of Termination revoking Drabinsky's membership in the Order of Canada, originally conferred in 1995 in the Officer grade. Drabinsky subsequently filed an application in the Federal Court of Canada to block his removal, which was dismissed on January 9, 2014. He subsequently appealed the decision to the Federal Court of Appeal. The appeal was heard in December 2014, and rejected the following month, when the court held that there was "no basis" for it to intervene in the matter.
