COMMITMENTS AND CONTINGENCIES	9 Months Ended
Feb. 28, 2012
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE N – COMMITMENTS AND CONTINGENCIES Guarantees At February 28, 2012, we had certain third-party guarantees, which primarily arose in connection with our divestiture activities. The majority of these guarantees have no expiration date. Generally, we are required to perform under these guarantees in the event that a third-party fails to make contractual payments. During fiscal 1996, our shareholders approved the distribution of our family dining restaurant business (Morrison Fresh Cooking, Inc., “MFC”) and our health care food and nutrition services business (Morrison Health Care, Inc., “MHC”). Subsequently, Piccadilly Cafeterias, Inc. (“Piccadilly”) acquired MFC and Compass Group (“Compass”) acquired MHC. Prior to the distribution, we entered into various guarantee agreements with both MFC and MHC, most of which have expired. As agreed upon at the time of the distribution, we have been contingently liable for payments to MFC and MHC employees retiring under MFC's and MHC's versions of the Management Retirement Plan and the Executive Supplemental Pension Plan (the two non-qualified defined benefit plans) for the accrued benefits earned by those participants as of March 1996. On October 29, 2003, Piccadilly filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court in Fort Lauderdale, Florida. Following this, we have recorded, and begun to pay, our pro-rata share of the Piccadilly liabilities for which we have provided guarantees, including those for MFC employee benefit plans. We estimated our divestiture guarantees related to MHC at February 28, 2012 to be $2.7 million for employee benefit plans. In addition, we remain contingently liable for MHC's portion (estimated to be $1.9 million) of the MFC employee benefit plan liability for which MHC is currently responsible under the divestiture guarantee agreements. We believe the likelihood of being required to make payments for MHC's portion to be remote due to the size and financial strength of MHC and Compass. Litigation We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business. We provide reserves for such claims when payment is probable and estimable in accordance with U.S. GAAP. At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows. On September 30, 2009, the U.S. Equal Employment Opportunity Commission (“EEOC”) Pittsburgh Area Office filed suit in the United States District Court for the Western District of Pennsylvania, Civil Action No. 2:09-cv-01330-DSC, alleging the Company was in violation of the Age Discrimination in Employment Act (“ADEA”) by failing to hire employees within the protected age group in five Pennsylvania restaurants and one Ohio restaurant. On October 19, 2009, the EEOC filed a Notice of an ADEA Directed Investigation (“DI”), Charge No. 533-2010-00062, regarding potential age discrimination in violation of the ADEA in hiring and discharge for all positions at all restaurant facilities. On September 20, 2011, the EEOC issued a subpoena for records relating to the DI. On January 10, 2012, the EEOC sought to enforce the subpoena in federal court in Pittsburgh. We have denied the allegations in the lawsuit and are vigorously defending against both the suit and the DI. Discovery in both matters is underway. Despite the pending suit and DI, we do not believe that this matter will have a material adverse effect on our operations, financial position, or cash flows. On November 8, 2010, a personal injury case styled Dan Maddy v. Ruby Tuesday, Inc., which had been filed in the Circuit Court for Rutherford County, Tennessee, was resolved through mediation. Given that we maintain primary and secondary insurance coverage for claims such as the Maddy case, and we had previously paid the amount required by our self-insured retention limit, no payment was made by us at settlement. Included in the Maddy settlement was a payment made by our secondary insurance carrier of $2,750,000. Despite making this voluntary payment, our secondary insurance carrier has now filed a counterclaim against us in the coverage suit we had brought against that carrier prior to the Maddy settlement. The counterclaim is based on our alleged failure to timely notify the carrier of the underlying case in accordance with the terms of the policy and that we have been “unjustly enriched” by the settlement as a result of the carrier's payment of a portion of the Maddy settlement. Following the settlement, we dismissed our claims for bad faith, breach of contract and violation of the state consumer act, which we had pursued against that carrier. We preserved certain claims, including a claim for attorney's fees, against that carrier in the event we are successful in this litigation. We believe our secondary insurance carrier received timely notice in accordance with the policy and we will vigorously defend this matter. Should we incur potential liability to our secondary carrier, we believe we have indemnification claims against two claims administrators. We believe, and have obtained a consistent opinion from outside counsel, that we have valid coverage under our insurance policies for any amounts in excess of our self-insured retention. We believe this provides a basis for not recording a liability for any contingency associated with the Maddy settlement. We further believe we have the right to the indemnification referred to above. Based on the information currently available, our February 28, 2012 and May 31, 2011 Condensed Consolidated Balance Sheets reflect no accrual relating to the Maddy case. There can be no assurance, however, that we will be successful in our defense of our carrier's counterclaim against us.

NOTE N – COMMITMENTS AND CONTINGENCIES

Guarantees

At February 28, 2012, we had certain third-party guarantees, which primarily arose in connection with our divestiture activities. The majority of these guarantees have no expiration date. Generally, we are required to perform under these guarantees in the event that a third-party fails to make contractual payments.

During fiscal 1996, our shareholders approved the distribution of our family dining restaurant business (Morrison Fresh Cooking, Inc., “MFC”) and our health care food and nutrition services business (Morrison Health Care, Inc., “MHC”). Subsequently, Piccadilly Cafeterias, Inc. (“Piccadilly”) acquired MFC and Compass Group (“Compass”) acquired MHC. Prior to the distribution, we entered into various guarantee agreements with both MFC and MHC, most of which have expired. As agreed upon at the time of the distribution, we have been contingently liable for payments to MFC and MHC employees retiring under MFC's and MHC's versions of the Management Retirement Plan and the Executive Supplemental Pension Plan (the two non-qualified defined benefit plans) for the accrued benefits earned by those participants as of March 1996.

On October 29, 2003, Piccadilly filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court in Fort Lauderdale, Florida. Following this, we have recorded, and begun to pay, our pro-rata share of the Piccadilly liabilities for which we have provided guarantees, including those for MFC employee benefit plans.

We estimated our divestiture guarantees related to MHC at February 28, 2012 to be $2.7 million for employee benefit plans. In addition, we remain contingently liable for MHC's portion (estimated to be $1.9 million) of the MFC employee benefit plan liability for which MHC is currently responsible under the divestiture guarantee agreements. We believe the likelihood of being required to make payments for MHC's portion to be remote due to the size and financial strength of MHC and Compass.

Litigation

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business. We provide reserves for such claims when payment is probable and estimable in accordance with U.S. GAAP. At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows.

On September 30, 2009, the U.S. Equal Employment Opportunity Commission (“EEOC”) Pittsburgh Area Office filed suit in the United States District Court for the Western District of Pennsylvania, Civil Action No. 2:09-cv-01330-DSC, alleging the Company was in violation of the Age Discrimination in Employment Act (“ADEA”) by failing to hire employees within the protected age group in five Pennsylvania restaurants and one Ohio restaurant.

On October 19, 2009, the EEOC filed a Notice of an ADEA Directed Investigation (“DI”), Charge No. 533-2010-00062, regarding potential age discrimination in violation of the ADEA in hiring and discharge for all positions at all restaurant facilities. On September 20, 2011, the EEOC issued a subpoena for records relating to the DI. On January 10, 2012, the EEOC sought to enforce the subpoena in federal court in Pittsburgh. We have denied the allegations in the lawsuit and are vigorously defending against both the suit and the DI. Discovery in both matters is underway. Despite the pending suit and DI, we do not believe that this matter will have a material adverse effect on our operations, financial position, or cash flows.

On November 8, 2010, a personal injury case styled Dan Maddy v. Ruby Tuesday, Inc., which had been filed in the Circuit Court for Rutherford County, Tennessee, was resolved through mediation. Given that we maintain primary and secondary insurance coverage for claims such as the Maddy case, and we had previously paid the amount required by our self-insured retention limit, no payment was made by us at settlement.

Included in the Maddy settlement was a payment made by our secondary insurance carrier of $2,750,000. Despite making this voluntary payment, our secondary insurance carrier has now filed a counterclaim against us in the coverage suit we had brought against that carrier prior to the Maddy settlement. The counterclaim is based on our alleged failure to timely notify the carrier of the underlying case in accordance with the terms of the policy and that we have been “unjustly enriched” by the settlement as a result of the carrier's payment of a portion of the Maddy settlement.

Following the settlement, we dismissed our claims for bad faith, breach of contract and violation of the state consumer act, which we had pursued against that carrier. We preserved certain claims, including a claim for attorney's fees, against that carrier in the event we are successful in this litigation. We believe our secondary insurance carrier received timely notice in accordance with the policy and we will vigorously defend this matter. Should we incur potential liability to our secondary carrier, we believe we have indemnification claims against two claims administrators.

We believe, and have obtained a consistent opinion from outside counsel, that we have valid coverage under our insurance policies for any amounts in excess of our self-insured retention. We believe this provides a basis for not recording a liability for any contingency associated with the Maddy settlement. We further believe we have the right to the indemnification referred to above. Based on the information currently available, our February 28, 2012 and May 31, 2011 Condensed Consolidated Balance Sheets reflect no accrual relating to the Maddy case. There can be no assurance, however, that we will be successful in our defense of our carrier's counterclaim against us.