H
152
34 Commitments and contingencies (continued)
Deli XL
Our strategy
Our performance
Governan
Financials
Investors
Ahold Annual Report 2013
Ahold has provided corporate guarantees to certain suppliers of Ahold's franchisees or non-consolidated entities. Ahold would be required to perform under the guarantee if the franchisee
or non-consolidated entity failed to meet its financial obligations, as described in the guarantee. Buyback guarantees relate to Ahold's commitment to repurchase stores or inventory from
certain franchisees at predetermined prices. The buyback guarantees reflect the maximum committed repurchase value under the guarantees. The last of the corporate and buyback guarantees
expire in 2017.
Loan guarantees relate to the principal amounts of certain loans payable by Ahold's franchisees, non-consolidated real estate development entities and joint ventures. The term of most
guarantees is equal to the term of the related loan, the last of which matures in 201 6. Ahold's maximum liability under the guarantees equals the total amount of the related loans plus, in most
cases, reasonable costs of enforcement of the guarantee.
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.
Contingent liability cap
Closing date
Local currency
million
million
Disco
November 1, 2004
€15]
151
BI-LO Bruno's January 31, 2005 $33 24
September 12, 2005
€40
40
U.S. Foodservice
July 3, 2007
None2
None2
Tops Markets
December 3, 2007
$70
51
Tops' Wilson Farms Sugarcreek
December 3, 2007
$5
4
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 obligation relating to the litigation described below.
2 No cap on contingent liability, but Ahold has an indemnification obligation if a $40 million threshold is exceeded. The threshold was exceeded in 2009. See also the litigation described 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 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 S.A. (Disco) and Disco for certain claims made by alleged creditors of certain Uruguayan and other banks. For additional information, see the
Uruguayan litigation described in the Legal proceedings section below. Ahold's indemnification obligation relating to this litigation is not capped at a certain amount nor restricted to a certain
time period.
