Ruby Tuesday abruptly stopped paying pensions to more than 100 retirees, leaving them scrambling amid the pandemic

• In August, retiree Mark Potter suddenly stopped receiving his pension payments from Ruby Tuesday.
• Documents show that Ruby Tuesday advised its trustee, Regions Bank, to stop paying pensions to at least 112 retirees on July 21, months before declaring insolvency on September 2.
• But the agreement between Ruby Tuesday and Regions stated the chain had to notify the bank of its insolvency before it could cease pension payments.
• On September 28, Regions filed a lawsuit against Ruby Tuesday, asking a court to determine whether the chain's actions were legal.
• In the meantime, Potter and the other retirees are stuck in pension purgatory, with no idea of when or if their payments will resume.

Mark Potter did everything he was supposed to.

After 28 years working his way up the ladder at Morrison's Cafeterias to become a district manager, Potter retired in 1999 with the knowledge that his pension plan was a lifelong one.

Morrison's Cafeterias had acquired Ruby Tuesday in 1982 before splitting into three companies: Ruby Tuesday, Morrison Healthcare, and Morrison's Fresh Cooking — a cafeteria company that was later bought by rival chain Piccadilly Restaurants. When Morrison's split in 1996, the three entities entered a legal agreement to divide their retirees' pensions, James Holland, a former Morrison's Cafeterias vice president, told Business Insider.

Holland also explained that if one company filed for bankruptcy, the other companies assume responsibility for its portion of the pension payments. For example, when Piccadilly filed for bankruptcy in 2004, Ruby Tuesday and Morrison's Healthcare split Piccadilly's share of the payments.

In August, Potter's pension payments from Ruby Tuesday suddenly stopped coming. He called Ruby Tuesday repeatedly to ask why, but received no response.

In mid-September, Potter received a letter from Regions Bank, the trustee for Ruby Tuesday's pension plan, saying Ruby Tuesday, which had just received between a $5 million to $10 million PPP small business loan, had instructed the financial institution to stop paying the pensions on July 21. On September 2, Ruby Tuesday had notified Regions Bank that the chain was insolvent, or unable to pay its debts.

However, the original agreement between Regions Bank and Ruby Tuesday stated the chain had to declare insolvency before pension payments could be stopped. So Regions Bank filed a lawsuit on September 28 in Alabama's Northern District Court against Ruby Tuesday, asking the court to determine whether Ruby Tuesday was legally able to ask the the bank to suspend payments before declaring insolvency.

Now, Potter, Holland, and the 110 other retirees named in the complaint — plus more who may not have been identified yet — suddenly find themselves in pension purgatory, with no idea of when or if their payments will resume.

Ruby Tuesday did not respond to Business Insider's repeated requests for comment. But a letter from Ruby Tuesday's human resources department dated August 1 — which Potter said he didn't receive until he reached out directly to the department on August 5 — stated Ruby Tuesday intends to resume payments as soon as possible.

That brings no comfort to Potter and his former coworkers, who must survive now on just a portion of their pension as they wait for Ruby Tuesday to dig itself out of insolvency and resume payments — or declare bankruptcy.

Potter said he feels angry and betrayed by a company he dedicated his life to, and said the other retirees felt the same.

"What are we supposed to do, get a job at Starbucks?" Potter said.

He's been retired for more than 20 years now, and his age puts him in the high-risk category for COVID-19. For Potter and the other retirees, finding a job to replace their lost pension income isn't just impractical, it's life-threatening.

Barry Timmons, who retired in 2000 after 28 years at Morrison's, said he received his last payment from Ruby Tuesday in July, and hasn't figured out a way to replace the lost income.

"It always hurts when part of the amount you depend to live on goes away," Timmons told Business Insider.