BUSINESS
10/05/2011 12:00 EDT | Updated 12/05/2011 05:12 EST

Garth Drabinsky, Former Theatre Mogul, Applies For Bail

CP

TORONTO - After spending less than a month behind bars, former theatre mogul Garth Drabinsky is asking to be released on bail as he tries to appeal his fraud convictions at the country's highest court.

The request for bail and notice of leave to appeal to the Supreme Court come after Ontario's Court of Appeal refused to overturn Drabinsky's two fraud convictions last month.

His lawyers are now questioning whether legal errors were made when his appeal was heard at the provincial level.

"The applicant's proposed application for leave to appeal is not frivolous. It raises important legal questions," they write in documents filed in court.

Drabinsky and his business partner Myron Gottlieb — each convicted in 2009 on two counts of fraud related to the famous theatre company they founded — were imprisoned in mid-September after a three-judge panel upheld their convictions.

Their sentences, however, were trimmed with Drabinsky facing five years in prison and Gottlieb four.

Only Drabinsky has filed a bail application so far, for which a hearing will be held on Friday.

His lawyer Edward Greenspan could not be reached for comment while his co-counsel Michael Lacy said he couldn't speak to the matter as it was set to go before the courts.

Drabinsky and Gottlieb's company, Livent Inc., was once considered the toast of the Canadian theatre scene but collapsed in bankruptcy in 1998 with investors losing an estimated $500 million.

The two men were convicted after Ontario court Judge Mary Lou Benotto found that during a nine-year span they manipulated the income reported by Livent with a kickback scheme which dated back to 1989.

The pair appealed both their convictions and their sentences, arguing the fraud was executed by other Livent employees without their knowledge.

Their lawyers argued — unsuccessfully — that the testimony from former employees was not credible.

Court documents suggest Drabinsky's counsel plans to raise the same issue again if the Supreme Court agrees to hear the case.

Drabinsky's leave to appeal at the Supreme Court is based on a number of grounds including whether the Ontario court of appeal committed an "overriding and palpable factual error" which led them to dismiss the appeal.

It also questions whether the provincial court was mistaken in finding Benotto "did not err in her approach to the issue of potential collusion" — or conspiracy — between two key Crown witnesses.

Meanwhile, in making their bail application, Drabinsky's lawyers point out that the former theatre impresario was on bail "without incident" both before his trial and while his appeal was underway.

"It has never been suggested that his detention was necessary in the public interest," they said.

Drabinsky spent his first full night behind bars Sept. 12, the day before his appeal judgment was released, and has been imprisoned ever since.

Court documents show he was initially held at the Toronto Jail but transferred to the Milhaven Institution in Kingston, Ont., where he is waiting to be assessed for placement.

The documents also state that Drabinsky will likely be classified as a minimum security inmate and will later be transferred to a minimum security institution.