In an out-of-court deal, the Big Five firm, which served as Drabinsky’s personal accountant for 20 years, reportedly acknowledged breaching its fiduciary duty to Drabinsky by allowing KPMG Investigation & Security to probe the financial affairs of Livent Inc., Drabinsky's theatre production company, which produced hits such as "Ragtime" and "Showboat." Livent collapsed in 1998 amid a fraud scandal.

Under the settlement, KPMG can no longer participate in any investigation of Livent's affairs except under compulsion of law and cannot disclose copies of any of Drabinsky's documents in its possession, Reuters reported. Financial terms of the settlement were not disclosed. KPMG said it settled to avoid the additional time and cost of a trial and possible appeals, according to the report.

Drabinsky in September of 1998 filed suit against KPMG to stop the firm's investigation of the financial records of Livent, the company Drabinsky founded and was suspended from in August 1998, alleging that the examination was a conflict of interests for KPMG, since the firm conducted a financial review of Livent before the management team who hired KPMG for the investigation took over.

Livent in August of 1998 suspended Drabinsky, then vice chairman, and fellow co-founder Myron Gottlieb, pending an investigation of alleged accounting irregularities. In 1998, as Livent filed for bankruptcy protection, U.S. securities regulators charged company executives in connection with what they said was an eight-year scheme to inflate earnings, Reuters said.