Notes to the consolidated financial statements
33 Commitments and contingencies continued
Stop Shop Bradlees Lease Litigation with Vornado
Waterbury litigation
34 Subsequent events
35 List of subsidiaries, joint ventures and associates
Consolidated subsidiaries
31 www.ahold.com/reports2008
Financial statements
AHOLD ANNUAL REPORT 2008 106
In connection with the spin-off of Bradlees in May 1992, discussed under Contingent Liabilities above, 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 (the "Master Agreement") relating to 18 leases for which Vornado was the landlord. Pursuant to the
Bradlees Bankruptcies, Bradlees either rejected or assumed and assigned the leases subject to the Master Agreement. In 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, comprised of USD 5 million (EUR 4 million) annually through 2012, and, if certain renewal
options are exercised, USD 6 million (EUR 4 million) 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. In
2002, Stop Shop filed a Court claim that it is not obligated to pay the rental increases demanded by Vornado. In 2005, Vornado
filed a counterclaim seeking damages and a declaration that Stop Shop is obligated to pay rental increases. The proceedings are
ongoing. Stop Shop continues to believe that it is not obligated to pay the rental increases demanded by Vornado and intends
to vigorously pursue the litigation and defend against Vornado's claims.
In October 2006, a putative class action was filed against U.S. Foodservice by Waterbury Hospital and Cason, Inc. and Frankie's
Franchise Systems Inc. with the United States District Court for the District of Connecticut in relation to certain U.S. Foodservice
pricing practices (the "Waterbury Litigation"). Two additional putative class actions were filed in 2007 by customers of U.S.
Foodservice, Catholic Healthcare West and Thomas King, Inc., in the U.S. District Courts for the Northern District of California
and the Southern District of Illinois, respectively. These two new actions involve the same pricing practices as those in the Waterbury
Litigation. The new actions also name Ahold and two individuals as defendants. In accordance with the decision of the Judicial Panel
on Multidistrict Litigation, in 2008 the actions have been consolidated with the Waterbury litigation before the Court in Connecticut.
In the consolidated complaint, Ahold is (among other parties) named as defendant. Parties exchanged formal documents in 2008.
Oral argument took place in February, 2009. Ahold believes it has meritorious defenses to the claims set forth in the complaint and
intends to defend vigorously against the lawsuit. Ahold cannot at this time provide a reasonable estimate of any potential liability.
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 will not, in the
aggregate, have a material adverse effect on Ahold's consolidated financial position, results of operations, or cash flows. Such other
legal proceedings, however, are subject to inherent uncertainties and the outcome of individual matters is not predictable. It is
possible that Ahold could be required to make expenditures, in excess of established provisions, in amounts that cannot reasonably
be estimated.
In January 2009, the Swedish Tax Agency announced that it would not allow ICA to delay the payment of SEK 742 million
(EUR 68 million) for disputed interest deductions from ICA during 2001-2003. ICA has paid the disputed amount in February
2009, but appealed the decision and recorded a receivable for the paid amount. For more details regarding this tax claim,
see Note 33.
The following are Ahold's significant subsidiaries, joint ventures and associates as of December 28, 2008.
Unless otherwise indicated, these are wholly or virtually wholly owned subsidiaries. Subsidiaries not important to providing an insight
into the Ahold Group as required under Dutch law are omitted from this list. With respect to the separate financial statements of the
Dutch legal entities included in the consolidation, the Company availed itself of the exemption laid down in section 403, subsection
1 of Book 2 of the Netherlands Civil Code. Pursuant to said section 403, Ahold has assumed joint and several liabilities for the
debts arising out of the legal acts of a number of subsidiaries in the Netherlands, which form part of the consolidation. The names
of the subsidiaries for which Ahold has issued 403 declarations are open for inspection at the trade register as managed by the
Netherlands Chamber of Commerce.
