Former LandAmerica Customers Vote For Bankruptcy Plan

Innsbrook-based LandAmerica’s former 1031 exchange customers have come to the final stage of grief: acceptance. After a fiercely contested and emotional battle against the formerly Richmond-based title insurance company, 97 percent of the exchangers voted for the bankruptcy plan. Some of the better-off former customers will get most of their money back shortly. Others will only get […]

November 19, 2009; 9:02 AM • by Aaron Kremer

Innsbrook-based LandAmerica’s former 1031 exchange customers have come to the final stage of grief: acceptance. After a fiercely contested and emotional battle against the formerly Richmond-based title insurance company, 97 percent of the exchangers voted for the bankruptcy plan.

Some of the better-off former customers will get most of their money back shortly. Others will only get about a quarter of what they set aside in LandAmerica’s 1031 Exchange, and have to pin their hopes on litigation against the directors and officers as well as SunTrust, which sold LandAmerica auction-rate securities.

In the spring of 2008, those investments became illiquid, and LandAmerica was unable to pay the customers back money they intended to set aside for just a short time.

LandAmerica declared bankruptcy in November 2008, refusing to return the money.

In the end, most of the exchangers probably decided it was better to get some money now and keep the legal fees from eating even more into their dwindling pool of funds.

“It’s surprising because it is so sensible,” said Ron Page, an attorney with Durrette Bradshaw who represents several exchangers. “It’s the right thing to do financially, but there was a visceral side to this case. And that hasn’t seemed to be represented in this voting.” “There wasn’t an exchanger revolt that was predicted by so many.” The Federal Bankruptcy Court in Richmond will hold hearings starting Wednesday to approve the plan.

November 19, 2009 9:02 AM 0