Extended News posted 2/3
LandAmerica to cut 291 more jobs
Feb 03, 2009 (Richmond Times-Dispatch - McClatchy-Tribune Information Services via COMTEX) -- LandAmerica Financial Group Inc., a bankrupt Henrico County-based company with Richmond roots dating to 1925, is closing down.
LandAmerica filed notice with the state that all headquarters jobs would be phased out by Dec. 31.
Employees will not receive any severance.
The first wave of cuts will come April 1 and affect 42 people. The biggest wave will happen April 15 when 139 people, from accountants to technical support specialists, will be let go.
By the end of the year, 291 employees will be laid off, including the chief financial officer and chief legal officer, according to the filing.
"The board [of directors] has been very focused on the impact this situation has on employees, but unfortunately we're faced with the realities of the current economy and the realities of Chapter 11," said the court-approved chief restructuring officer, Jonathan "Joff" Mitchell. He is overseeing operations of LandAmerica, which last spring was on the Fortune 1000 list.
Severance packages will not be awarded because the company is in bankruptcy, LandAmerica spokeswoman Carol Gentry said.
"The problem here is the company has no money," said Robert M. Lawless, a bankruptcy law professor at the University of Illinois law school. "This is what's known as turnip law. You can't get blood out of a turnip."
At the start of 2008, the firm employed the equivalent of 11,050 full-time employees nationwide, including 930 in the Richmond area.
The company, one of the top 50 employers locally, was hit hard by the financial turmoil last year, especially slowing housing markets and the credit crunch.
Today, it has about 2,200 employees, including about 300 locally.
LandAmerica and a subsidiary -- LandAmerica 1031 Exchange Services Inc. -- filed for bankruptcy protection Nov. 26 and announced plans to sell LandAmerica's primary title insurance businesses, which accounted for about 90 percent of the company's revenue.
The deal to purchase Lawyers Title Insurance Corp. and Commonwealth Land Title Insurance Co. closed Dec. 22 and with that, LandAmerica transferred 5,100 employees to the purchasing company, Fidelity National Financial Inc. of Jacksonville, Fla.
Less than a month later, Chairman and Chief Executive Theodore L. Chandler Jr. left the company. Mitchell, from the New York interim management firm Zolfo Cooper, has been in charge since.
The company hopes to sell off its remaining businesses, Gentry and Mitchell said.
"We're currently going through a procedure in Chapter 11 of trying to maximize the remaining value of the estate," Mitchell said.
LandAmerica directly owns 20 subsidiaries, which in turn own more than 90 other subsidiaries in Arizona, California, Florida, Michigan, Canada, the Cayman Islands, Mexico and elsewhere, according to LandAmerica.
"I think it's likely many of the subsidiary companies will be sold," Mitchell said. "There's never no buyer. It's all just a question of price."
------
Contact Emily C. Dooley at (804) 649-6016 or edooley@timesdispatch.com.