Underwriter Euler American Credit Indemnity has notified policyholders it will no longer insure their accounts receivable on business done with beleaguered U.S. Foodservice Inc., people familiar with the matter said.
U.S. Foodservice is a unit of Ahold NV, a large Dutch supermarket and food-distribution company which said last week it had discovered "significant accounting irregularities" at its U.S. distributor. The disclosure of perhaps $500 million in overstated operating income led to the resignations of Ahold's chief executive and chief financial officers and triggered investigations by the U.S. Justice Department and the Securities and Exchange Commission.
