OTTAWA - Theatre impresarios Garth Drabinsky and Myron Gotlieb have lost their bid to quash a court-ordered payment of over US$36 million to former investors in Livent Inc.

But there could be more legal wrangling in store before any money actually changes hands.

The Supreme Court of Canada, in a decision released without comment Thursday, denied permission for the two men to appeal a lower-court judgment that went against them.

The dispute stems from a class-action lawsuit filed in New York by noteholders who lost their money when Livent went bankrupt in 1998. They claimed they had been misled by company statements that gave a false picture of its financial health.

A U.S. district court judge, in a ruling issued in 2005, ordered company co-founders Drabinsky and Gotlieb to pay $23 million to the plaintiffs, plus interest that brought the total to $36.5 million.

The Ontario Superior Court ruled in 2007 that the New York judgment was enforceable in Canada, and the Ontario Court of Appeal upheld the decision the following year.

Drabinsky and Gotlieb, who didn't testify during the New York civil proceedings, claimed their hands were tied in defending the suit because bail conditions arising from a separate criminal prosecution prevented them from leaving Canada.

The Superior Court judge rejected that contention, while the appeal panel concluded there was nothing legally unfair about recognizing the U.S. judgment and enforcing it north of the border.

The refusal of the Supreme Court to review the case means the order to pay up stands.

But Jasmine Akbarali, one of the Canadian lawyers for the plaintiffs, cautioned that it may take some time to sort out all the details.

"In an ideal world the losing party writes a cheque, but whether or not that happens here remains to be seen," said Akbarali. "It would certainly be nice, but otherwise we do judgment debtor exams to shape where we go now."

That process would involve an assessment of what kind of income or other assets Drabinsky and Gotlieb have, and how the claimants can gain legal access to them.

The two men are currently awaiting a verdict, due next month in Toronto, on criminal charges of fraud and forgery.

Prosecutors allege they bilked investors and banks of up to Cdn$500 million by misrepresenting the value of Livent. Drabinsky and Gotlieb say they were victims of an elaborate conspiracy to frame them.