Rat Pack in legal brawl

The name of the café connotes swingin' party times among the boys.

But the relationship between the buddies running The Rat Pack Café in downtown Wilmington is approaching splitsville, according to legal papers.

Edward Sutton III, 49, who teamed up with Jeffrey M. Medgebow, 56, in 2010 to open the café on the ground floor of 300 Delaware Ave. has hauled his partner into Chancery Court alleging Medgebow committed numerous financial improprieties, including double-charging catering customers and diverting café money to Medgebow's other businesses.

The café, named for a group of famous Hollywood entertainers led by Frank Sinatra, is now operating under a status quo order pending a trial in 2015. Medgebow, who is in charge of the café's day-to-day operations, declined to comment Tuesday. His lawyer did not return a call for comment.

"It's a personal matter," Medgebow said Tuesday, as he manned the counter at the cafe.

Legal papers paint the story of unusual business relationship.

Sutton, a former state trooper who spent 16 years on the force, said he met Medgebow in 2009 when Medgebow was a customer of Above & Beyond Bail Bonds, Sutton's bail bonds business. Medgebow was convicted drug and conspiracy charges, according to court documents.

The relationship between the men soon blossomed into a business deal, according to Sutton's attorney, Richard Abbott. Sutton said he did not think he was taking a risk.

Medgebow, the son of a major post-war homebuilder, had been in the restaurant business and once owned three Sandwich Town USA shops in Wilmington, Pike Creek and Newark, according to lawsuit.

Medgebow's father, William Medgebow, built many of New Castle County's suburban communities with with his nephew, the late Leon N. Weiner. Their company, Franklin Builders, built Leedom Estates, Green Meadow, Green Acres, Radnor Green, Green Tree and Nottingham Green, to name a few.

Together, Sutton and Medgebow opened The Rat Pack Café, a cozy office building eatery featuring pictures of Sinatra, Dean Martin and Sammy Davis Jr., as well as their music.

Sutton kicked in $130,000 in cash and direct payments to providers of café goods and services, according to Sutton. Medgebow put in $37,500 in the value of equipment he contributed, the lawsuit says.

The café was a profitable venture, according to the lawsuit. For four years, it generated consistent sales in catering, and morning and lunchtime traffic, the complaint says. But a few months ago, Sutton began receiving "anecdotal information from café employees" indicating serious financial problems with the business, the lawsuit says.

"For example, suppliers terminated business relations, banks closed accounts, and customers complained of improper charges – all by Medgebow," the complaint says.

According to Sutton, Medgebow used café partnership funds to pay for Sandwich Town USA obligations. The café had not paid rent to landlord Brandywine Realty Trust for eight months and is 'at risk of eviction at any time," the lawsuit says.

"Numerous suppliers who continue to do business with the café now require cash on delivery payment. And emergency trips to BJ's Wholesale and other food and material retailers have been needed to keep the café afloat," Sutton alleges in his lawsuit.

Now, the business is at "imminent risk of failure and closure," Sutton says in his complaint.

"The café business state of affairs is dire," the lawsuit says. "It will go out of business at any time now based upon Medgebow's violations of his duties."

Sutton is asking the court to award Sutton his 50 percent share of the café profits and enter a restitution award for the café partnership.

Medgebow continues to run the business and has been ordered to provide Sutton with access to bank account balances and expenditures.

Vice Chancellor J. Travis Laster has ordered that Medgebow not be paid more than $600 a week.

Contact Maureen Milford at (302) 324-2881 or mmilford@delawareonline.com.