Long Island Business News
January 26, 2012
By David Winzelberg
Joanne Trattoria, a West 68th Street restaurant being opened by Lady Gaga’s parents and celebrity chef Art Smith next week, is expected to be the next hot thing, but a Long Island couple is feeling left out in the cold.
Until last March, Joe and Rosalia Palminteri of West Babylon had a 20 percent stake in the previous restaurant at the site, Vince & Eddies, an Italian eatery run by Peter DiGiussepi and in which the elder Gagas, Joseph and Cynthia Germanotta, also had a financial interest.
Joe Palminteri met DiGiussepi decades ago and invested in the restaurant in 1999, using the proceeds of a $150,000 second mortgage. The couple later lent DiGiussepi an additional $25,000, according to documents obtained by Long Island Business News.
The Palminteris said their investment paid off handsomely for several years, with DiGiussepi showing up faithfully each month to pay their cut in cash. But the payments, which initially averaged $1,600 a month, dwindled over time and stopped completely in 2009, when DiGiussepi told the couple the restaurant was losing money.
According to the documents, Lady Gaga’s parents got involved in 2010, investing about $350,000. Nonetheless, Vince & Eddies closed the following March, after falling significantly behind on its $15,000-a-month rent and taxes.
The Palminteris said attempts to contact their former partner have been unsuccessful and that they were made aware of the new Gaga family restaurant from news reports.
The corporate status of the previous eatery is unclear. The Palminteris’ shareholder agreement and New York state liquor licenses list the business as V&E Inc., although there is no record of a firm by that name in state incorporation filings.
DiGiussepi declared personal bankruptcy last fall, listing debts of $825,649 and assets of $4,425, according to court records. Among the debts were back wages and tips to 19 Vince & Eddies employees, $113,000 in state taxes owed by the restaurant and more than $350,000 to Lady Gaga’s father and the family’s Second Wind Restaurant Corp. Vince & Eddies landlord, Chaim Rozenblatt, was listed as being owed $129,000.
The Palminteris’ $25,000 loan was also listed, but there was no mention of their $150,000 investment.
DiGiussepi, Joseph Germanotta and Rozenblatt did not respond to requests to comment for this report. In his bankruptcy filing, DiGiussepi also signed his name as DiGiuseppi. His name is also spelled DiGiuseppe in other court documents.
Things weren’t always frosty between the Palminteris, both 63, and DiGiussepi, 60. The Palminteris used to join DiGiussepi on his frequent weekend trips to Atlantic City, where he had accounts at several casinos, they said. A regular at the Baccarat tables, where the minimum bet was $2,500, DiGiussepi and his trademark pinky ring with diamond-encrusted “P,” would drop more than $50,000 in a night, according to the Palminteris. He still owes a Trump casino $36,000 from a 2007 trip, according to court records.
The Palminteris have hired Kessler International, a Port Jefferson Station financial forensics and investigations firm, to try to find out what happened to their investment and how they might get some of it back.
“I wouldn’t mind if he gave us a little bit, but he gave us nothing,” Rosalia Palminteri told LIBN.
A retired secretary, Rosalia said she spends much of her time caring for her ailing husband, who is incapacitated by liver disease. The couple has about $100,000 in debt and survives mostly on Social Security checks, she said.
DiGiussepi is being sued by former Vince & Eddies employees, who allege they are owed six years in back wages and tips. The plaintiffs include Gary Gonzales, a former Vince & Eddies kitchen and floor manager, who said he also invested $90,000 in the restaurant. He dismisses DiGiussepi’s claims that the restaurant was failing.
“We would make the rent in one weekend,” Gonzales, a 13-year veteran of the eatery, said.
Attorney Louis Pechman, of Berke-Weiss and Pechman, who represents the former Vince & Eddies employees, said the alleged violations, including diversion of tips and failure to correctly pay overtime and minimum wage, are commonplace in New York restaurants.
Pechman won a record $3.15 million settlement from Sparks Steak House on similar charges and has filed more than 50 such cases against New York area restaurants.
DiGiussepi, he lamented, is the first to have “slipped away.”