LandAmerica selling its title companies
- January 1, 2009
LandAmerica Financial Group Inc., one of Virginia’s Fortune 1,000 companies, soon will be much smaller.
The Henrico County-based real estate services company is selling 90 percent of its business to companies owned by Fidelity National Financial of
Jacksonville, Fla., one of LandAmerica’s biggest rivals in the title insurance industry. The $282 million deal includes three LandAmerica’s companies —
Commonwealth Land Title Insurance Co., Lawyers Title Insurance Corp. and United Capital Title Insurance Co.
The transaction actually is Fidelity National’s second attempt to acquire LandAmerica’s title business. It had proposed a merger with LandAmerica in early
November. But two weeks later Fidelity called off the deal after examining LandAmerica’s books.
The latest deal, announced Nov. 26, does not include the LandAmerica parent company and a subsidiary, LandAmerica 1031 Exchanges Services Inc., which has
ceased operations. In announcing the sale of its title insurance companies, Land-America also filed for protection from creditors under Chapter 11
LandAmerica, the third largest title insurer in the country, has been hard hit by the declining real estate market and the collapse of a little-known market
in auction-rate securities. LandAmerica 1031 Exchanges Services had used the market to hold money for real estate customers who typically were exchanging one
piece of property for another. The number 1031 refers to the section of the Internal Revenue Code allowing capital gains to be deferred in this type of
LandAmerica canceled all life and health insurance benefits for about 2,000 retirees. A spokeswoman said LandAmerica didn’t have the money to continue the
LandAmerica follows Circuit City Stores Inc as the second major Richmond-area company to file for Chapter 11 in recent months.