LandAmerica Financial stock sale bid procedures approved by court

By Caroline Salls

Pittsburgh, April 22 - LandAmerica Financial Group, Inc. received court approval of the bid procedures for the proposed $10 million sale of its interests in home warranty operating entities and the bid procedures for the proposed $6.5 million sale of its stock in LoanCare Servicing Center Inc. and LC Insurance Agency Inc., according to Tuesday filings with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The home warranty operating entities include LandAmerica Home Warranty Co., LandAmerica Property Inspection Services, Inc., Buyer's Real Estate Services, Inc. and Residential Property Maintenance, Inc.

Buyers Protection Group, Inc. is the stalking horse bidder for the home warranty entity sale.

LandAmerica said Buyers Protection's shares will be owned by Revell Fraser and the Stephens Group, LLC or Stephens Group affiliates.

Stephens Group will be the majority owner or will own the controlling interest in Buyer Protection, and Fraser will own a minority interest and will serve as a senior executive and officer of the stalking horse bidder.

In addition, the company said Fraser is currently an officer and director of some divisions of the home warranty business and is also a LandAmerica senior vice president.

Buyer Protection has paid a $300,000 deposit toward the purchase price.

If Buyer Protection is not the high bidder at auction, LandAmerica will pay it a $300,000 break-up fee and reimburse up to $200,000 of its sale-related expenses.

Competing bids are due by noon ET on May 7 and must be for at least the stalking horse bid amount and the amount of the break-up fee and expense reimbursement, plus $100,000.

All bids must include a $300,000 deposit.

The auction will be held May 11, and the sale hearing is scheduled for May 14.

LoanCare stock sale

Meanwhile, the stalking horse bidder for the LoanCare and LC Insurance stock sale is Alpine Equity, LP.

Competing bids are due by 4 p.m. ET on May 8 and must be for at least $50,000 more than Alpine's bid, plus cover the break-up fee and expense reimbursement.

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.

The auction will be held on May 12 if competing bids are received, and the sale hearing is scheduled for May 14.

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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