o www.ahold.com/reports2009
Notes to the consolidated financial statements
34 Commitments and contingencies - continued
Financials
Tops convenience stores
Pursuant to applicable law, Tops may be contingently liable to landlords under 193 leases assigned in connection with the sale of the
Tops' Wilson Farms and Sugarcreek convenience stores in the event of a future default by the tenant under such leases and Ahold may
be contingently liable to landlords under guarantees of 72 such leases in the event of a future default by the tenant under these leases.
Tops northeast Ohio stores
Tops closed all of its locations in northeast Ohio prior to year-end 2007. As of January 31, 2009, 32 of the total 55 closed locations
in northeast Ohio have been sold or subleased. An additional 12 leases have been terminated. 11 stores continue to be marketed.
In connection with the store sales, Tops and Ahold have certain post-closing indemnification obligations under the sale agreements,
which Ahold believes are customary for transactions of this nature. Pursuant to applicable law, Ahold may be contingently liable to
landlords under guarantees of 14 of such leases in the event of a future default by the tenant under such leases. In the event Ahold
is able to assign the leases for the remaining northeast Ohio stores, then pursuant to applicable law, Ahold also may be contingently
liable to landlords under guarantees of certain of such remaining leases in the event of a future default by the tenant under such leases.
Additionally, under U.S. pension law, the buyers of certain of Tops stores assumed the pension withdrawal liability associated with the
underfunding of certain pension funds and Tops remains secondarily liable in the event the buyer defaults within five years as described
in the relevant pension plan.
Schuitema
In connection with the sale of Ahold's interest in Schuitema, Ahold has only given very limited guarantees. In addition, Albert Heijn B.V
has acquired certain C1000 stores through a share purchase agreement. Effectively, Albert Heijn has acquired the shares of approximately
12 newly established companies, in which the relevant assets, being stores and real estate, had been split off from Schuitema.
Other contingent liabilities
ICA tax claims
The Swedish Tax Agency has decided to disallow interest deductions by ICA Finans AB, a company in the ICA Group, for interest on
borrowings from the Irish subsidiary ICA Ahold Export Unltd of SEK 1,795 million (€173 million) for the period 2001-2003. ICA appealed
the decision to the County Administrative Court, which in December 2008 ruled in favor of the Swedish Tax Agency. The Swedish Tax
Agency's claim is SEK 747 million (€72 million), including penalties and interest. ICA's judgment is that the deductions it made complied
with applicable tax laws. External counsels who have examined the legal position, the Swedish Tax Agency's argument and the County
Administrative Court ruling side with ICA. ICA has appealed the County Administrative Court's decision to the Swedish Administrative Court
of Appeal. The hearing at the Appeal Court is scheduled to take place in April 2010. The Swedish Tax Agency did not grant ICA a payment
deferment, due to which SEK 747 million (€72 million) was paid in February 2009. The amount is booked as a receivable from the
Swedish Tax Agency.
Moreover, the Swedish Tax Agency has decided to disallow interest deductions of SEK 4,064 million (€393 million) made in 2004-2008 to
a Dutch Group company. The Swedish Tax Agency's claim amounts to SEK 1,333 million (€129 million) (including penalties and interest).
ICA is convinced that the deductions it made complied with tax laws. External counsels who have examined the legal position and the
Swedish Tax Agency's argument side with ICA. ICA has appealed the Swedish Tax Agency's decisions to the County Administrative Court.
Legal proceedings
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 balance sheets.
Governmental/regulatory investigations
The Civil Division of the U.S. Department of Justice was conducting an investigation, which Ahold believes related to certain past 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). In December 2009, a settlement in principle was reached with the Department of Justice under which U.S. Foodservice
is obliged to pay an amount of $30 million (€21 million) to the U.S. government. In connection with the indemnification obligation
mentioned in the table above, Ahold has recognized a charge for an amount of $12 million (€8 million).
Ahold Annual Report 2009 111
