Notes to the
consolidated
financial statements
continued
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
Ahold USA BI-LO Bruno’s
In connection with the sale of BI-LO and Bruno’s, Ahold Delhaize may be contingently liable to landlords under guarantees of some 200 BI-LO or
Bruno’s operating or finance leases that 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 was recognized in 2009. BI-LO exited bankruptcy in May 2010 and the
Company has re-evaluated its estimate of liability. For more information, refer to the Guarantees section of this Note.
Sweetbay, Harveys and Reid’s and Bottom Dollar Food
As part of Ahold Delhaize’s divestment of Sweetbay, Harveys and Reid’s and Bottom Dollar Food, Ahold Delhaize has provided guarantees for a
number of existing operating and finance lease contracts, which extend through 2037. At of January 1, 2017, Ahold Delhaize may be contingently
liable for 99 leases related to the Sweetbay, Harveys and Reid’s divestment and 38 leases related to the Bottom Dollar Food divestment. In the
event of a future default of the buyer, Ahold Delhaize will be obligated under the terms of the contracts to the landlords. The leases guaranteed
are in respect of two specific buyers. The Sweetbay, Harveys and Reid’s stores were sold to BI-LO and the Bottom Dollar Food stores were sold to
Aldi. For more information, refer to the Guarantees section of this Note.
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.
Tops Markets, LLC
In connection with the sale of Tops in 2007, Ahold Delhaize has certain post-closing indemnification obligations under the sale agreement that the
Company believes are customary for transactions of this nature. Ahold Delhaize retained liabilities in the sale, including contingent liability for 45
leases that carry Ahold Delhaize guarantees. Additionally, Ahold Delhaize 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
under Tops convenience stores.
Tops convenience stores: Wilson Farms and Sugarcreek
Pursuant to applicable law, Tops may be contingently liable to landlords under 186 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. Ahold Delhaize may be contingently
liable to landlords under the guarantees of 77 of these leases in the same event.
Tops northeast Ohio stores
Tops closed all of its locations in northeast Ohio prior to year-end 2006. As of January 1, 2017, 33 of the total 55 closed locations in northeast Ohio
have been sold or are now subleased or partially subleased. An additional 19 leases have been terminated. Three stores continue to be marketed.
In connection with the store sales, Tops and Ahold Delhaize have certain post-closing indemnification obligations under the sale agreements,
which Ahold Delhaize believes are customary for transactions of this nature. Pursuant to applicable law, Ahold Delhaize 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. If Ahold Delhaize is able
to assign the leases for the remaining northeast Ohio stores, then pursuant to applicable law, Ahold Delhaize 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.
Tom Co
On July 29, 2016, Ahold Delhaize completed the divestment of pet specialist chain shop Tom Co. As part of the transaction, Ahold Delhaize
granted indemnities to the purchaser of all divested stores, which Ahold Delhaize believes are customary for transactions of this nature.
