Note 11 - Commitments and Contingencies

9 Months Ended

Feb. 28, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

1

1

. Commitments and Contingencies

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 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 condensed 

consolidated operations, financial position, or cash flows.

As also discussed in Note

15

to the Condensed Consolidated Financial Statements, in

May

2014,

a securities class action case styled Dennis Krystek v. Ruby Tuesday, Inc. et al, was filed in the U.S. District Court for the Middle District of Tennessee, Nashville Division.

  The case alleged that the Company and some of its former executives made false and misleading statements about the Company's financial performance and the financial performance of the Lime Fresh concept.  On

March

29,

2017,

the Company agreed to settle the case for

$5.0

million.  We maintain insurance to cover these types of claims with our primary insurance carrier, subject to a self-insured retention which had been met prior to

February

28,

2017.

  Our insurance policies cover amounts in excess of our self-insured retention. In accordance with ASC Subtopic

405

-

20

-

40,

Extinguishment of Liabilities

, and ASC Subtopic

210

-

20,

Balance Sheet Offsetting

, we have recorded both an accrued liability (included within Accrued liabilities: Rent and other) and an asset for insurance recovery (included within Accounts and other receivables), in the amount of

$5.0

million, in our Condensed Consolidated Balance Sheet as of

February

28,

2017.