LandAmerica sets bid procedures for proposed $6.5 million LoanCare sale

By Jennifer Lanning Drey

Portland, Ore., March 23 - LandAmerica Financial Group, Inc. requested court approval of the bidding procedures related to the proposed $6.5 million sale of its stock in LoanCare Servicing Center Inc. and LC Insurance Agency, Inc., according to a Friday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The stalking horse bidder is Alpine Equity, LP.

Competing bids are due by May 8 and must be for at least $50,000 more than Alpine's bid, plus cover the break-up fee and expense reimbursement.

An auction will be scheduled if competing bids are received.

If Alpine is not the high bidder, LandAmerica will pay it a $350,000 break-up fee and reimburse up to $100,000 of Alpine's out-of-pocket expenses.

LandAmerica said the sale is necessary because LoanCare's residential primary servicer ratings were downgraded following LandAmerica's filing for bankruptcy. As a result, some of its clients and prospects have threatened to decrease or halt the amount of new business they place with LoanCare.

The company said while the majority of LoanCare's existing subservicing loans have not been moved to another subservicer, the threat of further downgrade puts the retention of LoanCare's existing subservicing relationships at risk.

LandAmerica, a title insurance underwriter based in Glen Allen, Va., filed for bankruptcy on Nov. 26 in the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 08-35994.

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