LANDAMERICA (fka LFGRQ)

[gocubs418]

LandAmerica Gets OK To Auction Loan-Servicing, Warranty Units
Thursday 04/23/2009 4:34 PM ET - Dow Jones News

By Eric Morath
Of DOW JONES DAILY BANKRUPTCY REVIEW

LandAmerica Financial Group Inc. (LFGRQ) received bankruptcy court permission to auction off two of its businesses, having already lined up bidders willing to pay a total of $16.5 million for the units.
Alpine Equity L.P. offered $6.5 million for LandAmerica's LoanCare Servicing Center Inc. Alpine will serve as the lead bidder for the loan-servicing business at an auction scheduled for May 12, according to papers filed Tuesday with the U.S. Bankruptcy Court in Richmond.
LandAmerica separately reached a deal to sell four other subsidiaries, including LandAmerica Home Warranty Co., to Buyers Protection Group Inc. That company, which offered $10 million, will serve as the lead bidder for the assets at an auction scheduled for May 11.
LoanCare is a Virginia Beach, Va., company that administers loans for mortgage lenders, banks and credit unions nationwide.
LandAmerica attorneys said they need to quickly sell the unit because LandAmerica's Nov. 26, 2008, bankruptcy filing caused bond rating agencies to downgrade LoanCare, leading clients to move their business elsewhere.
LoanCare serviced more than 100,000 loans carrying a balance of $13.1 billion as of Nov. 30.
A sale would help LoanCare keep its existing customers and remain compliant with state and federal licensing requirements, according to court papers.
The deadline for bids is May 8. Alpine would be paid a $350,000 breakup fee if it's bested at auction.
LandAmerica Home Warranty sells policies in 45 states that cover home owners for unexpected repair and replacements of major home appliances and systems, such as refrigerators, central air and plumbing.
Buyers Protection Group, a company formed to purchase LandAmerica's home warranty assets, would be owned by Stephens Group LLC and Revell Fraser, a senior vice president at LandAmerica.
LandAmerica is seeking to sell the home warranty business because its bankruptcy is causing partners and vendors, such as CRES Insurance Services Inc., Sears Holdings Corp. (SHLD) and Whirlpool Corp. (WHR), to walk away.
Other interested buyers have until May 7 to submit bids. Buyers Protection Group would receive a $300,000 breakup fee if it's bested at auction.
The bankruptcy court will review the results from both auctions at a May 14 hearing.
LandAmerica, based in Glen Allen, Va., filed for bankruptcy protection after one of its other subsidiaries collapsed. The company operated a qualified intermediary business under section 1031 of the U.S. tax code. Such exchanges help taxpayers to defer gains from the sale of real estate.
LandAmerica 1031 Exchange Services shut down prior to LandAmerica's bankruptcy filing amid liquidity constraints as a result of the collapse of the auction-rate securities market.
After LandAmerica filed for Chapter 11 protection last year, it sold its title insurance businesses - Lawyers Title Insurance Corp., Commonwealth Land Title Insurance Co. and United Capital Title Insurance Co. - to Fidelity National Financial Inc. (FNF) for $298 million.
Those businesses accounted for more than 85% of the company's revenue. Since their sale, LandAmerica has been seeking buyers for, or shutting down, its remaining business units.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)
-By Eric Morath, Dow Jones Daily Bankruptcy Review; 202-862-9279; [e-mail]

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(END) Dow Jones Newswires
04-23-09 1634ET
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