The class-action case was filed in Richmond District Court. Photo by Michael Schwartz.
A long-lingering dispute from the ashes of LandAmerica is likely headed for a finale.
A class-action settlement has been preliminarily approved in federal court to pay out $5 million to certain former employees of collapsed Richmond financial giant LandAmerica Financial Group (LFG).
The case was born out of two separate lawsuits filed by a pair of disgruntled employees who blamed 15 former LandAmerica executives and directors, including former CEO Ted Chandler, for allegedly mishandling the company’s pension fund as the firm faltered and failed.
The suits were also aimed at triggering insurance policies that the company would have had to potentially cover the executives and directors in such an instance.
The two cases were eventually conjoined and sent to mediation sessions last summer. Finally, a court filing was made indicating that all sides had found at least some common ground to the tune of $5 million.
A hearing will be held in Richmond federal court on July 20, where a judge will determine if the $5 million settlement is fair and should head for final approval.
A similar case against LandAmerica succeeded in 2012 when it sought to blame the board members and executives for the company’s collapse. That case won a settlement of $36 million paid for by an insurance policy, despite initially seeking $365 million in damages.
Read the settlement (PDF)
Still up in the air is exactly how the $5 million in this latest case might be divvied up. The suit states that it is filed on behalf of all participants of the company’s retirement plan through July 2009, a class that could include at least 1,000 people and likely thousands more.
The case alleges that the 15 defendants failed to avoid inherent conflicts of interest in their oversight of the pension fund and its heavy reliance on LandAmerica stock, as many of their pay packages were tied to the performance of the company’s shares. The lawsuit claims violations of the federal Employee Retirement Income Security Act of 1974.
At the end of 2007, the plan held about 812,000 shares of LFG stock, which at the time had a value of $28.4 million.
A year later, the holdings of LFG stock had increased to more than 850,000, and their value stood at just $76,500. The company terminated its retirement plan in July 2009.
The size of the class is still being determined, and efforts to contact former plan participants are underway, including the publication of legal notices.
LandAmerica filed for bankruptcy in November 2008. At its height, the company was the third-largest title insurance underwriter in the United States. It was toppled when the market for auction rate securities froze in February 2008. Much of the company’s fortunes were tied up in such securities.
In addition to Chandler, the defendants in the case include former LandAmerica Chief Administrative Officer Ross W. Dorneman, former CFO G. William Evans, and former directors Janet A. Alpert, Gale K. Caruso, Michael Dinkins, Charles H. Foster Jr., John P. McCann, Dianne M. Neal, Robert F. Norfleet Jr., Robert T. Skunda, Julious P. Smith Jr., Eugene Trani, Thomas G. Snead Jr. and Marshall B. Wishnack.
They have all denied liability throughout the case, and the settlement would allow the matter to end without them admitting any wrongdoing.
The former LandAmerica executives and directors are represented in the case by Scott Fredericksen, an attorney with Foley & Lardner in Washington, D.C., and a team of attorneys from Skadden, Arps, Slate, Meagher & Flom.
Fredericksen declined to comment until a final approval is made. The others did not return calls for comment.
The plaintiffs and the class are represented by Mark Gyandoh of Kessler Topaz Meltzer & Check in Radnor, Pennsylvania. He did not return a call by press time.
The class-action case was filed in Richmond District Court. Photo by Michael Schwartz.
A long-lingering dispute from the ashes of LandAmerica is likely headed for a finale.
A class-action settlement has been preliminarily approved in federal court to pay out $5 million to certain former employees of collapsed Richmond financial giant LandAmerica Financial Group (LFG).
The case was born out of two separate lawsuits filed by a pair of disgruntled employees who blamed 15 former LandAmerica executives and directors, including former CEO Ted Chandler, for allegedly mishandling the company’s pension fund as the firm faltered and failed.
The suits were also aimed at triggering insurance policies that the company would have had to potentially cover the executives and directors in such an instance.
The two cases were eventually conjoined and sent to mediation sessions last summer. Finally, a court filing was made indicating that all sides had found at least some common ground to the tune of $5 million.
A hearing will be held in Richmond federal court on July 20, where a judge will determine if the $5 million settlement is fair and should head for final approval.
A similar case against LandAmerica succeeded in 2012 when it sought to blame the board members and executives for the company’s collapse. That case won a settlement of $36 million paid for by an insurance policy, despite initially seeking $365 million in damages.
Read the settlement (PDF)
Still up in the air is exactly how the $5 million in this latest case might be divvied up. The suit states that it is filed on behalf of all participants of the company’s retirement plan through July 2009, a class that could include at least 1,000 people and likely thousands more.
The case alleges that the 15 defendants failed to avoid inherent conflicts of interest in their oversight of the pension fund and its heavy reliance on LandAmerica stock, as many of their pay packages were tied to the performance of the company’s shares. The lawsuit claims violations of the federal Employee Retirement Income Security Act of 1974.
At the end of 2007, the plan held about 812,000 shares of LFG stock, which at the time had a value of $28.4 million.
A year later, the holdings of LFG stock had increased to more than 850,000, and their value stood at just $76,500. The company terminated its retirement plan in July 2009.
The size of the class is still being determined, and efforts to contact former plan participants are underway, including the publication of legal notices.
LandAmerica filed for bankruptcy in November 2008. At its height, the company was the third-largest title insurance underwriter in the United States. It was toppled when the market for auction rate securities froze in February 2008. Much of the company’s fortunes were tied up in such securities.
In addition to Chandler, the defendants in the case include former LandAmerica Chief Administrative Officer Ross W. Dorneman, former CFO G. William Evans, and former directors Janet A. Alpert, Gale K. Caruso, Michael Dinkins, Charles H. Foster Jr., John P. McCann, Dianne M. Neal, Robert F. Norfleet Jr., Robert T. Skunda, Julious P. Smith Jr., Eugene Trani, Thomas G. Snead Jr. and Marshall B. Wishnack.
They have all denied liability throughout the case, and the settlement would allow the matter to end without them admitting any wrongdoing.
The former LandAmerica executives and directors are represented in the case by Scott Fredericksen, an attorney with Foley & Lardner in Washington, D.C., and a team of attorneys from Skadden, Arps, Slate, Meagher & Flom.
Fredericksen declined to comment until a final approval is made. The others did not return calls for comment.
The plaintiffs and the class are represented by Mark Gyandoh of Kessler Topaz Meltzer & Check in Radnor, Pennsylvania. He did not return a call by press time.