Deloitte liable for some, but not all, of Livent's 1990s losses: Supreme Court

OTTAWA - The Supreme Court of Canada says the firm that audited the accounts of Garth Drabinsky's Livent should be held financially responsible for some -- but not all -- of the failed theatre company's losses two decades ago.

In a ruling today, the high court says Deloitte was liable for negligently auditing Livent's 1997 financial statements, though not for other conduct.

Lower court decisions left Deloitte on the hook for almost $85 million, but the Supreme Court ruling reduces the damages award to $40 million.

In 2016, the Ontario Court of Appeal said Deloitte should have been able to detect serious fraud in the financial statements of Livent, founded by colourful impresario Drabinsky and business partner Myron Gottlieb.

In the 1990s, Livent brought live theatrical productions such as "Phantom of the Opera" and "Joseph and the Amazing Technicolor Dreamcoat" to audiences across North America.

Deloitte argued in the Supreme Court that it was effectively being penalized for failing to resign as Livent's auditor.

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