Anyone who bought Bing Crosby’s gift cards as holiday presents didn’t see it coming. 

But the New Year’s Eve closure of Bing’s, a posh piano lounge homage to the late crooner, didn't surprise those familiar with the stacks of lawsuits, seeking millions in damages, filed against the restaurant’s owner, Dudum Sports and Entertainment, and against the company’s founders, brothers Jeff and Rick Dudum.

The Dudums say the economic downturn hit Bing Crosby’s in Broadway Plaza and other high-end venues in their restaurant empire hard. That, and competition from new upscale steakhouses such as Fleming’s and Ruth’s Chris —with a similar retro elegance and high prices — left the tables at the 280-seat Bing Crosby’s half filled some nights.

Meanwhile, the Dudums’ more casual, midpriced Walnut Creek restaurants, McCovey’s and the Carlos Santana-inspired Mexican restaurant Maria Maria La Cantina, are doing fine, the brothers say. Each restaurant is its own company. 

Nonetheless, the Dudum restaurant empire must navigate some dire financial straits.

The Dudums’ attorney Ray Rockwell, in a statement filed with court documents, spoke of the brothers fending off “various lawsuits” and dedicating “substantial amounts of time to dealing with lenders, suppliers, landlords and other creditors.” Rockwell’s statement was in a declaration filed in one of three lawsuits filed by banks that say the company and the brothers defaulted on loans. 

The coming year will bring court hearings and settlement conferences on at least a dozen lawsuits filed in Contra Costa, San Francisco, Sacramento and San Diego counties, as well as in federal court.

Two banks are suing the company and the Dudum brothers for $7.1 million in loan defaults. The other lawsuits contend that the brothers and DSE failed to pay about $2 million to distributors who sold food to their restaurants and to landlords and other companies for products and services. 

The debts amassed by DSE and related companies include at least $1.6 million in tax liens filed by Contra Costa and other counties, the states of California and Arizona and the federal government, according to court records and the Contra Costa Times.  These liens are associated with restaurant properties in Walnut Creek, Mill Valley, San Diego, Rancho Mirage and Arizona. 

In addition to Bing Crosby’s, McCovey’s and Maria, Maria, DSE owns Maria Maria La Cantina in Mill Valley, Tempe, Ariz. and Austin. Dudum Sports and Entertainment also owned Joe DiMaggio’s Chophouse, another top-market property, named for the famed New York Yankees slugger, in San Francisco. But that closed in October.

The Bing Crosby’s in Southern California also closed in recent months, the Times reported. Center Court, Jeff Dudum’s Sacramento restaurant venture with retired Sacramento Kings player Chris Webber, closed last year. Jeff Dudum and Dudum Sports and Entertainment were named as co-defendants in a lawsuit filed by the restaurant’s landlord claiming they owe $134,000 in rent, according to Sacramento County court records and the Sacramento Bankruptcy Lawyer blog. 

Jeff Dudum is no longer involved in DSE and had not been involved in Bing’s operations for about a year. His attention is focused on running the Maria Maria restaurants. 

In the glory days before the economic crash, he was the face of the company and its restaurants. He was seen as one of Walnut Creek’s movers and shakers who helped bring Walnut Creek’s dining and nightlife scene to a new level. 

“Without [Jeff] Dudum, the Creek might still be a sleepy town,” wrote Peter Crooks in a November 2004 profile of Dudum in Diablo magazine.

He was married to a successful local real estate agent, Mary Ellen Dudum, and the couple had two young sons. At the time of the Diablo profile, Bing Crosby’s was to be the sixth downtown business that Jeff Dudum opened in six years. He also owned the former Twist—described in Diablo as a “dose of big-city club life”—and Echo. He had owned the Cuban-themed Havana.

While the Dudum family likes to emphasize its philanthropic and community work, Jeff Dudum also is seen as one of Walnut Creek’s most controversial personalities. Several people who've had business dealings with him said he can be aggressive and arrogant. Dudum himself acknowledged his Type-A personality in his interview with Diablo. 

Rick Dudum, in an interview with the Times this week, tried to get across the point that the Dudum restaurant empire is not crumbling.

While Rick Dudum says that Maria Maria is “prospering,” IRS records show a $103,357 federal tax lien filed on Aug. 20 against the restaurant, the Times said. It also struggled after its owners “sank nearly $1 million into a new restaurant in Florida that was never completed,” the Times added. Court records show that DSE was sued by the landlord for $285,000 in back rent on the Mexican-themed restaurant’s property and others the company leased in Mill Valley and Santa Rosa.   

The Dudums acknowledged their liability in the case and a settlement was reached in which DSE would pay $16,952 each month, starting in July. A note would be guaranteed by Rick and Jeff Dudum and their father, Rocky Dudum.

The Times also reported that DSE sold McCovey’s to Rocky Dudum. This appears to be part of the reorganization the brothers are engaged in, according to their lawyer. The brothers, he said, “have been working diligently and dedicating significant time to reorganizing and managing the various businesses with which they are affiliated.” 

Records show the extent to which the brothers tried to expand their restaurant empire and then to keep it afloat once the recession hit.

Fremont Bank filed suit in April 2009, alleging that DSE, the Dudums and their business partner, Tom Gonzales, a Nevada-based investor, breached their promissory note on a $2,720,000 loan for construction on a new Maria Maria in Tempe, Ariz.  By March 2010, DSE had defaulted on the loan with $1,904,000 left on the balance. California Bank and Trust also filed suit in San Francisco County, seeking $5 million in damages. 

In February 2009, Jeff and Rick Dudum received an unsecured construction loan of about $200,000 from Comerica Bank. The brothers defaulted on that loan and then made a repayment agreement, but as of the February 2010 due date, Comerica had received only a third of what it was owed.

Comerica has asked the court to order each brother to account for all his real and other property, earnings, liabilities and outstanding loans. Fremont Bank is likely to do the same, according to Steven Mains, an attorney representing the bank.

The property includes both men’s homes, including Rick Dudum’s homes in Walnut Creek and Palm Desert and the house in Alamo that Jeff Dudum shared with his wife of 10 years and children. However, in another blow to Jeff Dudum, he and his wife separated last year. Mary Ellen Dudum filed for divorce Nov. 5, citing irreconcilable differences. This was three days after Bing Crosby’s hosted the election night party for new City Council member Kristina Lawson and McCovey’s hosted Mayor Cindy Silva’s bash.

Jay Hoyer, president of the Walnut Creek Chamber of Commerce, doesn't doubt that the economy played a major role in Bing Crosby's downfall. He credited the restaurant with bringing a certain "panache" to Walnut Creek's dining scene and expects that the building, reportedly owned by a Dudum family trust, will be occupied again soon because of its prime location in Broadway Plaza. 

The Dudums say they have been scrambling to find jobs for Bing’s employees. They also intend to honor Bing’s gift cards. Call 925-588-2941 to be reimbursed in some way.