This has started happening recently, I think due to a change in bundler or possibly rvm that means YAML doesn't get loaded before the Gemfile's parsed. As such it highlights a bug in Foreman that was fixed in develop (for 1.2), but hasn't been backported to the 1.1 stable branch.
To fix it, add the following line to the very top of config/settings.rb
in the Foreman installation:
require 'yaml'