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Ruby Tuesday gets bankruptcy court approval of rabbi trust settlement
By Sarah Lizee
Olympia, Wash., Dec. 2 – RTI Holding Co., LLC (Ruby Tuesday) obtained court approval of a settlement with an ad hoc group of plan participants relating to the assets currently held in a rabbi trust for the company’s nonqualified executive supplemental pension plan and management retirement plan, according to an order filed Wednesday in the U.S. Bankruptcy Court for the District of Delaware.
On Oct. 15, the company requested that the court authorize it to exercise its ownership rights over the assets held in the rabbi trusts. On Nov. 16, the motions were granted.
That same day, counsel for the ad hoc group of plan participants informed the company and the court that it would appeal the court’s decision.
The company and the ad hoc group then discussed the impending appeals, as well as other claims against the debtors’ bankruptcy estates, and reached a settlement.
Under the settlement, the ad hoc group will not appeal the rabbi trust orders, and Ruby Tuesday will pay the group up to $275,000 initially for professional fees and costs.
The parties will also enter into a reconciliation process regarding the allowed amounts of claims asserted by the group. The debtors will pay up to an additional $50,000 for professional fees and costs related to the process.
“The settlement contemplates the use of a maximum of $325,000 in order to assure the estates’ access to approximately $27 million in proceeds from the rabbi trusts,” the company said in its motion.
Ruby Tuesday is a Knoxville, Tenn.-based foodservice retailer. The company filed Chapter 11 bankruptcy on Oct. 7 under case number 20-12456.
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