Here’s Why Tony-Winning Broadway Musical ‘Paradise Square’—Produced By A Convicted Fraudster

Topline

The musical Paradise Square will end its Broadway run on Sunday, but the production—which marked a return to Broadway for producer Garth H. Drabinsky after he was imprisoned for fraud—will live on in court, as it faces a mounting number of legal challenges for unpaid wages and other payment disputes for workers already hit by the Covid-19 pandemic.

The cast of ‘Paradise Square’ on Broadway takes a bow on April 3 in New York City.

Bruce Glikas/Getty Images

Key Facts

Two unions, United Scenic Artists and Actors Equity—which represent the production’s designers and performers, respectively—filed complaints against the production and producer Bernard Adams this month, the Hollywood Reporter first reported Tuesday, alleging unpaid wages and benefits.

The United Scenic Artists lawsuit, filed in federal court, argues the production owes $156,965.85 in unpaid wages and benefits, which an arbitrator had awarded to the union but it alleges the production never actually paid.

Actors Equity first sued the show in May seeking $174,091.32 for unpaid benefit contributions, later reaching a settlement agreement for $412,807, but it has now filed a separate lawsuit in state court for $189,877 after the production stopped making payments as the settlement requires, according to the Reporter.

The Actors Equity lawsuit comes after the union previously directed performers not to report to rehearsal in February for a day, which the Reporter and New York Post report was due to a contract dispute over payments.

A former group sales worker for the show sued the production in May in state court for $9,000 in unpaid wages; that dispute remains pending, though the production has moved to dismiss the claims.

Paradise Square was also taken to court by the Workers’ Compensation Board of New York in 2021 for $16,000 for allegedly failing to carry workers comp insurance, but that case has been settled.

What To Watch For

More lawsuits. According to the Reporter, more contractors with the show are still negotiating payments with the production, and could still file legal action.

Surprising Fact

Drabinsky is the lead producer on Paradise Square after serving a 17-month prison sentence, plus parole, in Canada. He was convicted in 2009 for defrauding investors of more than $400 million through his production company, which was behind a number of Broadway hits from the 1990s like Kiss of the Spider Woman and Ragtime. Drabinsky and his producing partner kept multiple sets of accounting books, falsely representing the company’s profits, and used fake invoices to funnel money directly to their bank accounts, the case’s trial uncovered, and he was initially sentenced to a seven-year prison term. Paradise Square marks Drabinsky’s first Broadway credit since Fosse in 1999. The producer is not directly implicated in the litigation that’s been filed against the show, however, which has instead named as defendants the production companies created to handle the show’s finances and Adams, who’s listed as the head of those companies instead of Drabinsky. (Drabinsky has been banned from participating in some business activities in Canada.)

Crucial Quote

“The producers have known for months that they owe the designers and assistant designers who have built the world of Paradise Square thousands upon thousands in unpaid wages and benefit contributions,” Carl Mulert, national business agent for United Scenic Artists’ Local USA 829, told the Reporter. “Now that the production is closing, who is being stiffed? Our members.”

Chief Critic

A spokesperson for Paradise Square declined to comment to Forbes on the litigation against it or the allegations of unpaid wages. In a statement to the Post in February about Actors Equity asking performers not to go to rehearsal, the production’s general manager Jeffrey Chrzczon said the production is “fully bonded…and no salaries have been missed throughout the nine years of [Paradise Square’s] development.” The general manager added: “Many of the actors in Paradise Square have worked with Mr. Drabinsky on previous productions.”

Tangent

Paradise Square has also raised eyebrows financially for raising its capitalization from $13.5 million to $15 million weeks after the show had already started performances on Broadway, Forbes previously reported in May, meaning it tried to raise even more money from investors than it initially said it would. The move was seemingly unprecedented for a Broadway show—which typically raises all of its money by opening night—and raised more questions about the show’s financial health.

Key Background

Paradise Square is a new musical focusing on relations between Irish and Black Americans in Civil War-era New York City, which opened on Broadway in April. Though the show earned 10 Tony Award nominations and one win for lead actress Joaquina Kalukango, who garnered attention for her performance during the awards ceremony, the show announced on Monday it would be closing less than a week later. The closing notice has followed months of disappointing sales for the production, which have likely driven the show’s financial troubles. The show grossed just $266,926 at the box office for the week ending July 10 and played to half-empty theaters on average, according to the Broadway League, and has failed to make even $500,000 at the box office in a week, far below what’s needed for expensive musical productions to recover their costs. The pay disputes also come after workers on Broadway have already suffered over a year of financial hits, as Broadway remained shuttered during the Covid-19 pandemic from March 2020 to fall 2021, leaving thousands unemployed.

Here’s Why Tony-Winning Broadway Musical ‘Paradise Square’—Produced By A Convicted Fraudster—Is Being Taken To Court