Upgrading from rails 2 to 3: undefined method use_standard_json_time_format

I am trying to upgrade rails from 2.3 to 3.1. I have referred the upgrade video from rails cast but i am having some difficulties.

Steps i have followed till now.
1. Create a separate rails-3 branch from stable branch.
2. Update & reload rvm to the latest version.
3. gem install rails -v 3.0.20
4. rails upgrade check and rails upgrade backup using rails upgrade plugin
5. rails new . --skip-active-record

when i start the server i am getting this error

initializers/new_rails_defaults.rb:13:in `<top (required)>': undefined method `use_standard_json_time_format=' for ActiveSupport:Module (NoMethodError)

can anyone please help. Thanks.