Garth Drabinsky and Myron Gottlieb will report to a Toronto jail early Monday evening to spend a long night in custody awaiting the outcome of an appeal of their 2009 fraud convictions.
Tuesday's ruling from the Ontario Court of Appeal may not be the end of the legal odyssey for the Livent Inc. co-founders, but it will be a pivotal decision that could significantly narrow their options for continuing the fight against their convictions and prison sentences.
Brendan Crawley, a spokesman for Ontario's attorney-general's office, said the two men will have to turn themselves in on Monday evening, ensuring they will be in custody when the appeal court decision is released Tuesday morning.
A legal source said the requirement is customary in all cases where people who have previously been sentenced to jail are free on bail pending an appeal. He said it does not signal which way the court will rule on the case.
"It's totally neutral, in terms of the success or failure of the appeal," the source said.
The bigger question for the two Toronto businessmen is how long they will remain in custody after Monday.
If the court of appeal overturns their convictions on two counts of fraud and orders a new trial in the case – as the men have sought – their lawyers could immediately again apply for bail on Tuesday afternoon, and they would likely be released immediately, the legal source said.
He said first-time offenders accused of non-violent crimes rarely remain in custody awaiting trial.
If the ruling upholds their convictions, however, Mr. Drabinsky and Mr. Gottlieb will immediately begin serving the sentences handed down in their cases in 2009.
Mr. Drabinsky was sentenced to seven years in jail, while Mr. Gottlieb received a six-year sentence after Madam Justice Mary Lou Benotto of the Ontario Superior Court ruled the two businessmen systematically manipulated Livent's financial statements between 1992 and 1998.
They have appealed both their convictions and the length of their sentences.
If the appeal is denied, the men have the option to seek leave to appeal from the Supreme Court of Canada, but such leave is not automatic, and court turns down a majority of the leave requests it receives.
Moreover, bail is not automatically granted to convicted offenders while they are seeking leave to appeal to the Supreme Court.
Their lawyers must convince an Ontario Court of Appeal judge that there are legitimate grounds to believe an appeal will succeed before bail is granted.
"You have to establish you have grounds that have merit – there is a threshold," the source said.
That means Mr. Drabinsky and Mr. Gottlieb could spend several days behind bars, or more, even if they plan a further appeal because their lawyers must formulate grounds so they can make arguments at a bail hearing.
It would be the first time they have spent more than a few hours in custody since their legal odyssey began with RCMP charges in 2002.
The case has been closely watched in Canada's business community because it is extremely rare for senior executives of a publicly traded company to be charged with fraud or to serve time in jail in Canada.
Livent went public in 1991 and became the largest live theatre company in North America until it collapsed in 1998 after new owners said they had uncovered evidence of accounting improprieties.
The case has also remained top of mind in Toronto's entertainment circles because Mr. Drabinsky has remained an active producer and organizer of entertainment events.
The film Barrymore, produced by Mr. Drabinsky, had its debut at the Toronto International Film Festival on Saturday. It is based on the hit stage play, which Mr. Drabinsky brought to Toronto earlier this year.