Trudy's files for bankruptcy, owes employees more than $267,000 in unpaid wages

Local Tex-Mex chain Trudy’s filed for bankruptcy Jan. 22 in Texas court.

Court filings show Trudy’s owes more than $267,000 to its employees in unpaid wages as of the payroll due Jan. 15 and another $190,000 for the period coming due Jan. 29. The restaurant’s debts include $1.04 million owed to restaurant vendor Sysco and $895,000 in taxes owed to the Internal Revenue Service.

Attorney Stephen Sather of Austin-based firm Barron & Newburger PC wrote in the filing that the restaurant’s financial issues began with the opening of Trudy’s Four Star in Dripping Springs, which he said lost more than $1 million per year from its opening in 2011 until it closed in 2019.

The restaurant was founded in 1977 by Gary Truesdell. Sather wrote that due to Gary Truesdell’s poor health, Stephen Truesdell—Gary’s son—is overseeing the reorgnization of the restaurant.

Trudy’s also has a location in North Central Austin at 8820 Burnet Road, Austin—Trudy's North Star—and one in South Austin at 901 Little Texas Lane, Austin—Trudy's South Star. Truesdell also operates the South Congress Café at 1600 S. Congress Ave., Austin. The original Trudy’s Texas Star location at 409 W. 30th St., Austin, has been closed since November due to a fire.

Trudy’s North Star was closed as of 3 p.m. on the afternoon of Jan. 24, with a sign on the door saying the restaurant would reopen Jan. 27.

According to the court documents, a levy from the IRS froze Trudy’s credit card receipts before the bankruptcy filing. Trudy’s has filed a court motion to authorize payment of wages, salaries and benefits to its employees.