LandAmerica Seeks Bankruptcy, Debt of $2.8 Billion (Update1)
By Dawn McCarty and Tiffany Kary
November 26, 2008
Nov. 26 (Bloomberg) -- LandAmerica Financial Group Inc., the third-largest U.S. title insurer, filed for bankruptcy after announcing a $298 million sale of three subsidiaries to Fidelity National Financial Inc and Chicago Title Insurance Co.
The Chapter 11 petition in U.S. Bankruptcy Court in Richmond, Virginia, listed $3.2 billion in assets and $2.8 billion in debt as of Sept. 30. LandAmerica said in a statement that it will sell Fidelity and Chicago Title its two principle title underwriting subsidiaries and another unit.
LandAmerica based in Glen Allen, Virginia, was forced to sell after losses from the decline in housing sales jeopardized its independence. LandAmerica had posted four straight quarterly losses.
"I am deeply disappointed over the need to file for bankruptcy protection for the LandAmerica holding company," to Theodore L. Chandler, Jr., the company's chairman and chief executive officer, said in the statement. The sale and bankruptcy filing "offers our stakeholders the best result available in this brutal real estate, credit and capital market environment."
Chicago Title will acquire LandAmerica's Commonwealth Land Title Insurance unit for $158.6 million and Fidelity will buy Lawyers Title Insurance and United Capital Title Insurance for $139.4 million, Fidelity said in a separate statement.
The company filed bankruptcy to facilitate the sale, the company said in the statement.
The four largest creditors without collateral backing their claims were listed as: Prudential Capital Group, owed $150 million, Bank of America as trustee, owed $125 million, SunTrust Bank, owed $100 million and Bank of New York Mellon as trustee, owed $98.5 million.
The company has provided real estate transaction services for over 130 years, and serves agent, residential, commercial and lender customers throughout the United States, Mexico, Canada, the Caribbean, Latin America, Europe and Asia, according to its Web site. As a title insurer, it uses a database and public records to verify a seller is the home's true owner and that the property is free from liens.
The case is: LandAmerica Financial Group, 08-35994, U.S. Bankruptcy Court, Eastern District Virginia (Richmond).
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