Item 1.01. Entry into a Material Definitive Agreement.
Settlement of the California Class Action Litigations
Ruth's Hospitality Group Inc. (the "Company") previously disclosed that in May
2022, the Company entered into a Memorandum of Understanding regarding
settlement of the class action litigations captioned Guerrero, et al. v. Ruth's
Hospitality Group, Inc., et al., Case No. RIC1804127, Superior Court of
California, Riverside County; Castillo, et al. v. RCSH Operations, Inc., et al.,
Case No. CGC-21-594237, Superior Court of California, San Francisco County;
Castillo v. RCSH Operations, Inc., et al., Case No. 21SMCV01530, Superior Court
of California, Los Angeles County; and Patterson v. Ruth's Hospitality Group,
Inc., et al., Case No. MSC21-02077, Superior Court of California, Contra Costa
County (collectively, the "Class Action Litigations"), in each of which the
Company was a defendant.
On April 27, 2023, the Company entered into a definitive settlement agreement
with Adrian Quiroz Guerrero, Anton Kaasa, Lucas Martin Arel, Eddie Castillo,
Juan Carlos Menendez Funes, and Amanda Patterson (together, "the Class Action
Plaintiffs"), individually and on behalf of the putative class, the State of
California, and the allegedly aggrieved employees, on terms consistent with the
Memorandum of Understanding (the "Settlement Agreement"). The Settlement
Agreement is subject to approval by the Superior Court of the State of
California for the County of Riverside, or any subsequent court in which the
Class Action Litigations have been coordinated (the "Court") and other
contingencies.
Under the terms of the Settlement Agreement, the Company will pay an aggregate
of $6 million to a settlement fund to settle all claims asserted in the Class
Action Litigations, class counsel's fees, and the costs of administering the
settlement. The Settlement Agreement establishes procedures for the
notification of claimants and the administration of the settlement. The
settlement fund will be used to pay notice and administrative fees relating to
the Class Action Litigations and to compensate those individuals who were class
members during the applicable class period; no amount of the settlement fund
will revert to the Company. The settlement fund will be managed by a neutral
third-party settlement administrator, which will be authorized to communicate
with class members and make payments from the fund in accordance with the terms
of the Settlement Agreement.
There can be no assurance as to the ultimate outcome of the Class Action
Litigations, including no assurance that the Settlement Agreement will be
approved by the Court or that any revised settlement terms, if applicable, will
be finalized by the parties and approved by the Court. The execution of the
Settlement Agreement does not constitute an admission by the Company of any
fault or liability and the Company does not admit fault or liability. If the
settlement cannot be finalized by the parties or the Settlement Agreement is not
approved by the Court, the Company will defend the Class Action Litigations
vigorously and believes there are meritorious defenses and legal standards that
must be met for, among other things, success on the merits. If the parties are
unable to finalize the settlement, the Class Action Litigations could have a
material adverse effect on the Company's financial condition, results of
operations and cash flows.
Safe Harbor for Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties. All forward-looking statements included in this report,
including expectations about the settlement of the Class Action Litigations, are
based on information available to the Company as of the date of this report,
which may change, and the Company assumes no obligation to update any such
forward-looking statements. These statements are not guarantees of future
performance and actual results could differ materially from the Company's
current expectations. Factors that could cause or contribute to such differences
include the risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission, as well as the possibility
that the Court may materially alter or fail to approve the Settlement Agreement.
The Company assumes no obligation and does not intend to update the
forward-looking statements provided, whether as a result of new information,
future events or otherwise.
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