Nov 29, 2005 9:54 AM, from staff and wire reports

Netherlands-based food retail giant Royal Ahold NV plans to separate US Foodservice, its American distribution unit, into two units. The action is aimed at restoring profitability after an accounting scandal in which Ahold falsified three years of earnings.

US Foodservice, the focus of the 2003 scandal, will be divided into a unit that distributes food and cooking equipment to schools and hospitals and one whose clients include fast-food franchises.

On November 28, Ahold settled a class-action lawsuit for $1.1 billion. This shareholder lawsuit accused the company of violating securities laws for more than two years.

Ahold conceded no wrongdoing in agreeing to the settlement, contending that it was trying to prevent more legal costs and distraction.