119
34 Commitments and contingencies continued
35 Subsequent events
Notes to the consolidated financial statements continued
Ahold
Annual Report 2010
Group at a glance
Performance
Governance
Financials
Investors
D&S litigation
In April 2005, the public company Distribucion y Servicio D&S S.A. (D&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
sought payment of approximately $47 million (€35 million) plus interest. In May 2007, the Court of First Instance decided against D&S in its
judgment and dismissed its claim against Ahold. The Court of Appeals has confirmed this judgment. In November 2009, D&S filed an
appeal against this decision with the Dutch Supreme Court on procedural grounds only. Ahold does not expect the matter before the
Supreme Court to change the outcome of the material proceedings. A judgment by the Supreme Court is expected in 2011.
At the initiative of D&S, an arbitration panel was appointed in February 2008 in proceedings against Disco in Argentina. The parties made
their final submissions in the proceedings before the arbitration panel in 2010. A judgment is expected in 2011. 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.
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) 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 continues to
vigorously pursue the litigation and defend against Vornado's claims.
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.
Completion of share buyback program announced in March 2010
On February 24, 2011, Ahold completed its €500 million share buyback program announced on March 4, 2010. The total number of
shares repurchased under the program was 50,359,330 common shares, for a total consideration of €500 million, at an average price
of €9.93.
In accordance with resolutions adopted at Ahold's 2010 General Meeting of Shareholders, 30 million of the shares bought back are in the
process of being cancelled. The remaining 20,359,330 of the shares bought back will be held by Ahold as treasury shares and are
intended to be used for employee share-based compensation in future years.
New share buyback program
On March 2, 2011, Ahold decided to return €1 billion to its shareholders by way of a share buyback program, to be completed over the
next 18 months.
