2 www.ahold.com/reports2008
Notes to the consolidated financial statements
33 Commitments and contingencies continued
Legal proceedings
Financial statements
AHOLD ANNUAL REPORT 2008 105
Ahold and certain of its subsidiaries are involved in a number of legal proceedings, which include litigation as a result of divestments,
tax, employment and other litigation. The legal proceedings discussed below, whether pending, threatened or unasserted, if decided
adversely or settled, may result in liability material to Ahold's financial condition, results of operations, or cash flows. Ahold may
enter into discussions regarding settlement of these and other proceedings, and may enter into settlement agreements, if it believes
settlement is in the best interests of Ahold's shareholders. In accordance with IAS 37 "Provisions, Contingent Liabilities and
Contingent Assets", Ahold has recognized provisions with respect to these proceedings, where appropriate, which are reflected
in Ahold's consolidated balance sheets.
Governmental/regulatory investigations
Following the announcement on February 24, 2003 that Ahold would be restating its financial position and results for the years
2001 and 2000, the U.S. Department of Labor ("DOL") opened an investigation under the Employment Retirement Income Security
Act (ERISA) into whether any criminal violations were committed by Ahold and certain of its current and/or former officers, directors
and employees in connection with the 401(k) plans of Ahold U.S.A., U.S. Foodservice and Stop Shop. In addition, in 2003 the
DOL also commenced a civil investigation relating to the U.S. Foodservice, Inc. 401(k) Savings Plan Master Trust to determine
whether any violations have occurred, including breaches of fiduciary duty, which investigation remains pending. To date, these
investigations have not been concluded. Ahold is fully cooperating with each of the DOL investigations.
The Civil Division of the U.S. Department of Justice is conducting an investigation, which Ahold believes relates to certain pricing
practices of U.S. Foodservice for sales made to the U.S. Government prior to the date of completion of the disposal of U.S.
Foodservice (July 3, 2007). Although Ahold believes it is probable that claims will be asserted in the civil investigation, Ahold
believes it may have meritorious defenses to such claims as may be asserted. Due to the stage of the civil investigation, Ahold
cannot at this time provide a reasonable estimate of the amount of any potential liability.
Proceedings regarding terminations
In October 2007, Ahold and its former Chief Executive Officer, Cees van der Hoeven and Chief Financial Officer, Michiel Meurs,
agreed in the context of their separation of Ahold in 2003 on the determination of their severance package in their respective
settlement agreements. Under the respective settlements, Mr. Van der Hoeven and Mr. Meurs completed payments of respectively
EUR 5 million and EUR 0.6 million in 2008.
In February 2004, James L. Miller, former Chief Executive Officer of U.S. Foodservice, filed an action against Ahold, Ahold U.S.A.,
U.S. Foodservice and various executive officers and directors of Ahold, asserting various causes of action in connection with U.S.
Foodservice's termination of his employment as of October 1, 2003. In December 2007, Ahold and Mr. Miller reached a settlement
under which Mr. Miller completed his payment of USD 8 million in 2008.
Uruguayan and Argentine litigation
Ahold, together with Disco S.A. ("Disco") and Disco Ahold International Holdings N.V. ("DAIH"), is a party to certain legal
proceedings in Uruguay and Argentina related to Ahold's acquisition of Velox Retail Holdings' shares in the capital of DAIH in 2002.
The proceedings are ongoing. The damages alleged by the plaintiffs, alleged creditors of certain Uruguayan and other banks, amount
to approximately USD 70 million (EUR 50 million) plus interest and costs. As part of the sale of Disco to Cencosud in 2004, Ahold
has indemnified Cencosud and Disco against the outcome of these legal proceedings. Ahold continues to believe that these legal
proceedings are without merit and will continue to vigorously oppose the plaintiffs' claims.
D&S c.s. litigation
In April 2005, the public companies Distribucion y Servicio D&S S.A. and Servicios Profesionales y de Comercializacion S.A.
(together "D&S c.s.") initiated legal proceedings against Ahold in the Netherlands, in connection with Disco's acquisition in 2000
of Supermercados Ekono S.A., which owned supermarkets in Buenos Aires, Argentina. D&S c.s. sought payment of approximately
USD 47 million (EUR 33 million) plus interest. In May 2007, the court in its judgment decided against D&S and dismissed its
claim against Ahold. D&S has appealed against this judgment. These appeal proceedings are ongoing.
At the initiative of D&S, an arbitration panel was appointed in February 2008 in proceedings against Disco in Argentina. Parties
have been exchanging formal documents in 2008 and the proceedings are ongoing. Disco believes it has meritorious defenses
in these proceedings. As part of the sale of Disco to Cencosud in 2004, Ahold has indemnified Cencosud and Disco against this
claim from D&S.
