| NEW YORK
NEW YORK May 21 The Dutch retailer Ahold
on Wednesday agreed to pay $297 million to settle U.S.
class-action litigation accusing its former U.S. Foodservice
distribution unit of defrauding thousands of hospitals and
restaurants through overcharges.
Ahold said it will take a 215 million euro charge in the
first quarter for the settlement in principle, which requires
approval by U.S. District Judge Alvin Thompson in Hartford,
It remained liable even after selling U.S. Foodservice, now
known as U.S. Foods, in 2007 to a group led by private equity
firms Clayton, Dubilier & Rice and Kohlberg Kravis Roberts.
The settlement came after the U.S. Supreme Court on April 28
refused to hear U.S. Foods' appeal of the class action, which
covered about 75,000 customers.
U.S. Foods is based in Rosemont, Illinois and employs about
25,000 people. Sysco Corp agreed in December to buy the
company for $3.5 billion, combining the two largest U.S. food
According to the lawsuit, U.S. Foodservice used shell
companies, sham transactions and phony invoices to inflate
prices it charged "cost-plus" customers from 1998 to 2005.
With Ahold's approval, the shell companies pretended to buy
and then resell food to U.S. Foodservice at a higher "invoice
cost," which would be passed on to customers, the lawsuit said.
Richard Wyatt, a Hunton & Williams partner representing the
plaintiffs, said he believes the settlement is among the largest
to resolve civil racketeering claims under the U.S. Racketeer
Influenced and Corrupt Organizations Act, or RICO.
He called the settlement "eminently fair" and believes it
represents "a very high percentage of the improper overcharges."
Lodewijk Hijmans van den Bergh, Ahold's chief corporate
governance counsel, in a statement said the accord lets the
company avoid further costly and time-consuming litigation.
In Sept. 2010, U.S. Foodservice agreed to pay $30 million to
settle U.S. Department of Justice accusations that it overbilled
on government contracts. The company denied wrongdoing.
Ahold's U.S. brands include Giant supermarkets in
mid-Atlantic states, Stop & Shop supermarkets in northeast
states, and the online grocery delivery service Peapod.
The case is In re: US Foodservice Inc Pricing Litigation,
U.S. District Court, District of Connecticut, No. 07-md-01894.
(Reporting by Jonathan Stempel in New York; Editing by Sofina