o www.ahold.com/reports2009
Notes to the consolidated financial statements
34 Commitments and contingencies - continued
Financials
Representations and warranties as part of the sale of Ahold's operations
Ahold has provided, in the relevant sales agreements, certain customary representations and warranties including, but not limited to,
completeness of books and records, title to assets, schedule of material contracts and arrangements, litigation, permits, labor matters and
employee benefits and taxes. These representations and warranties will generally terminate, depending on their specific features, one to
seven years after the date of the relevant transaction completion date.
Closing date
Contingent liability cap
Local currency
million million
Disco
November 1, 2004
S151
101
BI-LO/Bruno
January 31, 2005
$33
23
Deli XL
September 12, 2005
€40
40
Poland (Ahold Polska Sp. Z o.o.)
July 2, 2007
€1082
1082
U.S. Foodservice
July 3, 2007
None3
None3
Tops Markets
December 3, 2007
$70
49
Tops' Wilson Farm/Sugarcreek
December 3, 2007
$5
3
Schuitema
June 30, 2008
€129
129
1 Ahold assesses the likelihood to be liable up to the amount of the contingent liability cap to be remote. The cap does not include Ahold's indemnification obligations relating to
legal proceedings described below.
2 Including €33 million for the divestment of hypermarkets in 2005.
3 No cap on contingent liability, but an indemnification obligation of Ahold, if a $40 million threshold is exceeded. The threshold was exceeded in Q4 2009 by
$12 million, for which Ahold has recognized a charge as set out below.
The most significant sales of operations are described below. In addition, specific, limited representations and warranties exist for certain
of Ahold's smaller divestments in 2004, 2005, 2006 and 2007. The aggregate impact of a claim under such representations and
warranties is not expected to be material.
Bradlees
In 1992, Stop Shop spun off Bradlees Stores, Inc. ("Bradlees") as a public company (the "Bradlees Spin-off"). In connection with the
Bradlees Spin-off, Stop Shop assigned to Bradlees certain commercial real property leases. Pursuant to a 1995 reorganization of
Bradlees and a subsequent wind-down and liquidation of Bradlees following a bankruptcy protection filing in 2000 (collectively, the
"Bradlees Bankruptcies"), a number of such real property leases were assumed and assigned to third parties. Pursuant to applicable law,
Stop Shop may be contingently liable to landlords under certain of the leases assigned in connection with the Bradlees Spin-off and
subsequently assumed and assigned to third parties in connection with the Bradlees Bankruptcies.
Disco
Ahold is required to indemnify the buyers of Disco for (i) certain claims made in relation to the mandatory conversions into Argentine
pesos of certain of Disco's U.S. dollar debts and (ii) certain claims made by creditors of certain Uruguayan and other banks. For additional
information on these legal proceedings, see the "Legal proceedings" section below. Ahold's indemnification obligations relating to these
legal proceedings are not capped at a certain amount nor restricted to a certain time period.
BI-LO/Bruno's
In connection with the sale of BI-LO and Bruno's, Ahold may be contingently liable to landlords under guarantees of 200 BI-LO or Bruno's
operating or finance leases, which existed at the time of the sale in the event of a future default by the tenant under such leases. As a
result of the bankruptcy filings by BI-LO and Bruno's during 2009, a provision has been recognized. For more information, refer to the
"Guarantees" section above in this Note.
U.S. Foodservice
In connection with the sale of U.S. Foodservice, which closed on July 3, 2007 (the "Completion"), Ahold indemnified U.S. Foodservice
against damages incurred after the Completion relating to matters including (i) the putative class actions filed in 2006 and 2007 and
referred to below under "Waterbury litigation" and any actions that might be brought by any current or former U.S. Foodservice customers
that concern the pricing practices at issue in such litigation for sales made by U.S. Foodservice prior to the Completion and (ii) the
investigation commenced by the Civil Division of the U.S. Department of Justice into U.S. Foodservice's pricing practices for sales made
to the U.S. Government prior to the Completion. These investigations are described below.
Tops Markets, LLC
In connection with the sale of Tops in 2007, Ahold has certain post-closing indemnification obligations under the sale agreement that
Ahold believes are customary for transactions of this nature. Ahold retained certain liabilities in the sale, including contingent liability for
49 leases that carry Ahold guarantees. Additionally, Ahold retained liabilities related to stores previously sold, including guarantees on five
Tops stores in eastern New York state, as well as liabilities related to the Tops convenience stores and the stores in northeast Ohio as
outlined below.
Ahold Annual Report 2009 110
