Cook County Record

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Chicago bar, nightclub developers sue over partner's alleged pilfering of $2 million

By Scott Holland | Oct 29, 2015

Money with gavel

Two men who allege a business partner treated their Chicago bar, restaurant and nightclub businesses as his “personal piggybank,” taking $2 million in the process, have sued their former partner in Cook County Circuit Court.

Plaintiffs Brian Galati and Chireal Jordan, bar, restaurant and nightclub developers, are shareholders and members of The Cue Club and Capacity Bar Group. In their 35-count complaint filed Oct. 22, they seek “to enjoin and remedy ongoing malfeasance” by their partner, identified in the complaint as Mark Kwiatkowski.

Other named defendants in the complaint include Kwiatkowski’s wife, Jessica Kwiatkowski, as well as Etno Group. There are 20 anonymous defendants. Cue Club and Capacity Bar Group are listed as nominal defendants.

According to the complaint, Mark “Kwiatkowski used the corporate coffers of Cue Club and CBG as his own personal piggy bank for years” through routine and repeated “unauthorized distributions to himself, his wife and to his other business ventures” outside his relationship with Galati and Jordan. In attempts to mask his conduct, the plaintiffs asserted, Kwiatkowski denied Galati access to Cue Club’s bank accounts, even though Galati was listed as treasurer of Cue Club Inc.

“Facing increasing financial pressure in both his personal and professional life … Kwiatkowski abandoned any pretense that he was doing anything other than pillaging Cue Club Inc. and CBG’s operating accounts for his own personal use,” the complaint stated.

The plaintiffs discovered the alleged theft during an audit and say Kwiatkowski admitted taking more than $2 million from their joint ventures. They said they have not seen him since that day.

Kwiatkowski is president, secretary and one of two directors of Cue Club, according to the complaint, holding 61 percent of the outstanding shares of Cue Club’s common stock. Etno Group operates under the assumed name Kings County Tap; Kwiatkowski is one of two managing members. Jessica Kwiatkowski, Mark Kwiatkowski’s estranged wife, as well as 20 anonymous defendants, are listed because Mark Kwiatkowski made payments to them “with the actual intent of hindering, delaying or defrauding his creditors.”

Galati and Kwiatkowski, both experienced in the bar business in Chicago, met in late 2007 to discuss business agreements, the complaint stated. Jordan, who had been friends with Galati since 2005, got involved in business with Galati and Kwiatkowski in late 2012.

The joint venture ultimately birthed the Headquarters Beercade bar and vintage arcade in Chicago's Lakeview neighborhood.

The complaint detailed several individual deductions from business accounts for which Kwiatkowski allegedly had no plausible commercial explanation. It also included a text message Kwiatkowski allegedly sent Sept. 17, 2015, purportedly admitting his actions and how his actions negatively affected his partners.

Through the lawsuit, Galati and Jordan said they hoped to represent the interests of Cue Club and CBG, as well as shareholders and members. They asked the court to remove Kwiatkowski from his leadership positions within their joint ventures and impose a constructive trust over Kwiatkowski’s assets, as well as award monetary and punitive damages and legal fees. They want the court to restore Galati’s access to financial documents for the ventures such that he may begin to remedy the ramifications of Kwiatkowski’s alleged actions.

They also asked the court to ensure they are not obligated to make payments from their businesses’ funds to the people Kwiatkowski allegedly owes, including Jessica Kwiatkowski, Etno Group and the anonymous defendants.

Attorneys for Galati and Jordan are Christopher S. Griesmeyer and Mack H. Reed, of Greiman, Rome and Griesmeyer, Chicago.

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Organizations in this Story

Greiman, Rome & Griesmeyer, LLC