Shareholders’ Case Against Ruby Tuesday Survives Defendants’ Motion to Dismiss
On March 31, 2016, Judge Kevin H. Sharp of the Middle District of Tennessee issued a memorandum and order largely denying defendants’ motion to dismiss in a securities class action charging Ruby Tuesday and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
Ruby Tuesday, together with its subsidiaries, owns, develops, operates and franchises a chain of hundreds of casual dining restaurants in the United States and internationally, including its flagship Ruby Tuesday restaurant chain and Lime Fresh Mexican Grill (“Lime Fresh”) restaurants. The case alleges that during the April 10, 2013 and October 9, 2013 class period, Ruby Tuesday issued materially false and misleading statements regarding the company’s financial performance and future prospects.
The court noted that plaintiffs have “adequately shown that [d]efendants omitted material information about Lime Fresh’s performance and . . . acted recklessly in making these omissions. Plaintiffs have also shown that [d]efendants’ material omissions caused the [c]lass’s losses . . . .”
Krystek v. Ruby Tuesday, Inc., No. 3:14-cv-01119, Memorandum (M.D. Tenn. Mar. 31, 2016).
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