Judge Catherine C. Blake gave her initial approval to the settlement after a 90-minute hearing in U.S. District Court here. A hearing seeking final approval is planned for June. Blake said the settlement is "fair, adequate and reasonable."
The company and attorneys representing shareholders had announced in November that they had come to an agreement, but must get court approval before they can begin payouts.
The lawsuit stemmed from a 2003 accounting scandal that forced Ahold to restate earnings by $1.1 billion over three years. Most of the problems were related to inflated earnings at U.S. Foodservice, Columbia, MD. The grievance maintained that Ahold misled investors by presenting an inaccurate financial picture of the company to stockholders and inflating the price of its common stock. Ahold denies any wrongdoing in the settlement.
Those eligible for the settlement must have purchased or received dividends of common shares from July 30, 1999 to Feb. 23, 2003, according to court documents. Those who bought American depository receipts, which are U.S. certificates representing ownership of shares in a non-U.S. corporation, are also eligible.
The settlement fund will be divided into two parts. Fund A, which represents about 90% of the fund or 655 million shares, is for shares bought or sold during the time period. Fund B, which makes up about 10% of the fund or 276 million shares, is for shares bought during the time period but sold at a loss, according to court documents.
Ahold management has said the lawsuit is one of the last major legal obstacles it faces from the accounting scandal and the settlement allows it to get on with the business of rebuilding.
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