Financial statements - Notes to the consolidated financial statements
Note 35
of the Disco shares, Ahold will hold Cencosud and Disco harmless for the outcome of the tax assessment claims related to
the Disco Bonds.
D&S c.s. litigation
On April 28, 2003, the public companies Distribucion y Servicio D&S S.A. and Servicios Profesionales y de Comercializacion
S.A. (together, "D&S c.s.") initiated civil proceedings against DAIH in the Netherlands Antilles in connection with Disco's
acquisition in 2000 of Supermercados Ekono S.A. ("Ekono"), which owned supermarkets in Buenos Aires, Argentina. D&S c.s.
sought payment of approximately USD 47 (EUR 40) plus interest. The Court of First Instance in the Netherlands Antilles in its
judgment of September 5, 2005 dismissed all claims filed by D&S c.s. against DAIH. D&S appealed the judgment of
September 5, 2005. The appeal proceedings are now in their initial stage at the Joint Court of Appeals of the Netherlands
Antilles and Aruba. Following the judgment of The Court of First Instance in the Netherlands Antilles, Ahold changed its
assessment of this claim and, consequently, a provision in the amount of EUR 37 has been released in the third quarter of
2005. On April 26, 2005, D&S has initiated legal proceedings in relation to the aforementioned claim against Ahold before
the District Court of Haarlem in the Netherlands, seeking a similar amount in damages. Ahold's assessment of this claim is
not different from the assessment in the Netherlands Antilles proceedings.
Stop Shop Bradlees Lease Litigation with Vornado
In connection with the spin-off of Bradlees Stores, Inc. ("Bradlees") discussed under Contingent Liabilities below, Stop
Shop, Bradlees and Vornado (or certain of its affiliates, collectively "Vornado"), and a landlord on a number of the assigned
leases, entered into a Master Agreement and Guaranty, dated as of May 1, 1992 (the "Master Agreement").
The Master Agreement concerns 18 leases for which Vornado is the landlord. Pursuant to a 1995 reorganization of Bradlees
and a subsequent wind down and liquidation of Bradlees following a bankruptcy protection filing on December 26, 2000
(collectively, the "Bradlees Bankruptcies"), Bradlees rejected or assumed and assigned most of the leases subject to the
Master Agreement. On November 25, 2002, Vornado sent a written demand to Stop Shop to pay certain so-called "rental
increases" allegedly due under the Master Agreement in connection with certain leases. Vornado alleges that the rental
increases under the Master Agreement are worth "tens of millions of dollars," comprised of USD 5 (EUR 4) annually through
January 31, 2012, and, if certain renewal options are exercised, USD 6 (EUR 5) annually thereafter through the expiration
of the last lease covered by the Master Agreement, which Vornado alleges could extend until 2031, depending upon whether
renewal options are exercised. Stop Shop disputes that it owes these amounts.
On December 31, 2002, Stop Shop instituted an action in the U.S. District Court for the Southern District of New York
seeking a declaration that it is not obligated to pay the rental increases demanded by Vornado. Stop Shop then moved to
remand the action to New York State Court. In 2003, both parties moved for summary judgment. By a letter, dated June 25,
2003, and subsequent court order, the action was held in abeyance while various motions of the parties relating to jurisdiction
and other issues were pending and while the parties pursued an unsuccessful mediation. Ultimately, the action was remanded
to New York State Court in January, 2005. Following remand to the New York State Court, on February 14, 2005, Vornado
filed a counterclaim seeking damages and a declaration that Stop Shop is obligated to pay rental increases. In 2005, both
Vornado and Stop Shop filed motions for summary judgment and oppositions. The New York State Court denied both parties'
motions for summary judgment on December 9, 2005. No scheduling has been entered. No discovery has yet taken place.
Residual liabilities from disposals in 2003, 2004 and 2005
For a discussion of Ahold's contingent liabilities with respect to the divestments, see "Contingent liabilities-Sale of Ahold's
operations" below in this note. For a discussion of Ahold's divestments, see Note 12. Under customary provisions in the
agreements regarding such disposals, Ahold has indemnified certain claims brought against its former subsidiaries and has
guaranteed certain representations and warranties given in the disposal transactions. During 2004 and 2005 Ahold has
received a number of claims from the relevant parties with respect to such indemnifications and guarantees. Although ultimate
liability cannot be determined at present, Ahold is currently of the opinion that the amount of any such liability from these
claims will not have a material adverse effect on its financial position or results. Adequate provisions have been taken for
pending or threatened litigations where deemed necessary.
Other legal proceedings
In addition to the legal proceedings described above, Ahold and its subsidiaries are parties to a number of other legal
proceedings arising out of their business operations. Ahold believes that the ultimate resolution of these other proceedings
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