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Gaslight Lounge Owners Cheated Business Partners Out of $5M, Suit Says

 Two Gaslight Lounge owners claim the other two owners defrauded them out of $5 million over the course of 16 years.
Two Gaslight Lounge owners claim the other two owners defrauded them out of $5 million over the course of 16 years.
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MEATPACKING DISTRICT — A pair of owners at the West 14th Street hot spot Gaslight Lounge filed a multimillion-dollar lawsuit against two co-owners — claiming they were cheated out of a huge portion of the popular bar's profits and blocked from entering by burly bodyguards after announcing the action.

Gaslight owners Peter Collins and Matthew Reines slapped fellow owners William Reddy and David Curran, plus their accountant, with a suit filed Monday in New York Supreme Court that alleges they were cheated out of $5 million over the course of 16 years.

Collins and Reines argue that Reddy and Curran covered up the 400 W. 14th St. bar's financial records, preventing the plaintiffs from finding out until recently that their partners were siphoning funds, the lawsuit states.

"Reddy was not depositing the corporation's cash receipts into the corporation's bank accounts, but instead [was] diverting [them] to his own use and benefit to [the] plaintiffs' detriment," the legal papers claim.

Reddy and Curran did not immediately respond to inquiries, and their accountant, Vincent Cunzio, declined to comment.

Reddy told his business partners in July 2012 that he would take a break from running the bar because he was having a "nervous breakdown," the suit states.

Collins and Reines took over the Gaslight's accounting at that point and gradually came to believe they were being duped.

"By Feb. 26, 2013, a startling revelation began to emerge that hundreds of thousands, and possibly millions of dollars of cash generated from the business … had not been deposited into the corporation's bank accounts," the lawsuit charges.

When Collins and Reines told their partners last Tuesday that a fraud investigation was under way, Reddy and Curran switched the combination to the Gaslight's safe, changed the locks on the company's office and posted bodyguards outside, the suit adds.

The plaintiffs are seeking $5 million plus attorneys' fees. 

The Gaslight, at the corner of Ninth Avenue, has for years provided a more laid-back option to Meatpacking District revelers used to velvet ropes and strict door policies in the swanky nightlife area.