O www.ahold.com/reports2009
Notes to the consolidated financial statements
34 Commitments and contingencies - continued
Financials
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 2002 acquisition of Velox Retail Holdings' shares in the capital of DAIH.
The proceedings are ongoing. The damages alleged by the plaintiffs, alleged creditors of certain Uruguayan and other banks, amount to
approximately $70 million (€49 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 $47 million (€33 million)
plus interest. In May 2007, the Court of First Instance in its judgment decided against D&S c.s. and dismissed its claim against Ahold. The
Court of Appeals has confirmed this judgment. In November 2009, D&S c.s. filed an appeal against this decision with the Dutch Supreme
Court on procedural grounds only. Ahold filed a defense in December 2009. Ahold does not expect the matter before the Supreme Court
to change the outcome of the material proceedings.
At the initiative of D&S c.s., an arbitration panel was appointed in February 2008 in proceedings against Disco in Argentina. The proceedings
before the arbitration panel are ongoing. A judgment is expected in the course of 2010. 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 c.s.
Stop Shop Bradlees Lease Litigation with Vornado
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 $5 million (€4 million) annually through 2012, and, if certain renewal options are exercised, $6 million
(€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.
Waterbury litigation
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 involved the same pricing practices as those in the Waterbury Litigation. The new actions also
named Ahold and two individuals as defendants. In accordance with the decision of the Judicial Panel on Multidistrict Litigation, in 2008
the actions were consolidated with the Waterbury litigation before the Court in Connecticut. Ahold was (among other parties) named as
defendant. Both Ahold and U.S. Foodservice filed a motion to dismiss against the complaint. In December 2009, the Court in Connecticut
granted Ahold's motion to dismiss, as a result of which Ahold is no longer party in the proceedings. U.S. Foodservice's motion to dismiss
was partially rejected by the Court, as a result of which U.S. Foodservice remains defendant in the ongoing proceedings. Ahold cannot
at this time provide a reasonable estimate of any of its potential liability in connection with the indemnification obligation mentioned in the
table above.
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 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.
Ahold Annual Report 2009 112
