AIG and Ahold settle D&O litigation
Dutch retail giant Royal Ahold announced on Friday (16 July) that it had reached a settlement with AIG of all outstanding litigation relating to $100mn D&O coverage of its US Foodservice subsidiary.
Ahold, the world’s third largest food retailer after Walmart and France’s Carrefour, became embroiled in an accounting scandal early last year after admitting to overstatements of $1bn. The group is subject to a number of shareholder class action suits led by plaintiff lawyers Millberg Weiss, and is under SEC investigations.
In a statement, the company said: “Ahold today announced that it has settled all pending insurance coverage litigation with AIG Europe (Netherlands) N.V. regarding the directors and officers liability insurance policy for Ahold and its subsidiary U.S. Foodservice.
“Under the terms of the settlement announced today, the lawsuit filed by AIG in the District Court of Haarlem, The Netherlands and the lawsuit filed by U.S. Foodservice in the United States District Court for the District of Maryland (Northern Division) will both be terminated.”
Ahold spokesman Fritz Schmuhl is reported as saying: "AIG aimed to declare the insurance policy invalid, but that threat is now off the table."
Prior to the settlement AIG is understood to have threatened to refuse payment of claims resulting from the scandal, which saw Ahold restate profits for the period 2000-2002. Dozens of senior Ahold executives – including the group chief executive and CFO – lost their jobs as investors saw the stock value sink 75 percent.