From: LandAmerica CEO Communication
To: DL – Everyone at LandAmerica
Sent: Wed Nov 26 02:14:31 2008
Subject: LandAmerica Agrees to Sell Title Operations to Fidelity
Yesterday, we signed an agreement <http://landam.mediaroom.com/index.php?s=43&item=544 <http://landam.mediaroom.com/index.php?s=43&item=544> >Â to sell our principal title operations to Fidelity. This positive development is good news for our title insurance customers, employees and those who support them. Some employees will become part of the Transition Services team to assist with the orderly transition of our title operations to Fidelity. For those working in non-title subsidiaries, we will continue to assess the ongoing operations of those businesses. As we move forward, we will know more about the general impact of this transaction and will share that with you.
In order to make this transaction happen, weâ€™ve had to take two important steps. First, we filed for Chapter 11 bankruptcy protection for our holding company, LandAmerica Financial Group, Inc. and for our 1031 company, LandAmerica 1031 Exchange Services. Chapter 11 is a relief provision that enables a company with financial pressures to take care of its customers, employees and creditors in an orderly process. In effect, Chapter 11 is the way we will address the significant level of debt at the holding company.
Itâ€™s important to note that LandAmerica has over 150 separate legal entities and only two of them are in protection under Chapter 11. All of our other companies are in operation as part of LandAmerica.
The Nebraska Department of Insurance (NEDOI) is taking the other step that must occur to move our business to Fidelity. On Monday, the NEDOI filed a court order to take over our underwriters in a process called â€œrehabilitation.â€ This is critical to the process that allows Fidelity to obtain our underwriters.
Both steps, Chapter 11 for two companies and rehabilitation for our underwriters, in coordination with the stock purchase, are in the best interests of all stakeholders. While we need to obtain certain approvals, we anticipate closing as early as year-end. These actions also enable two trusted and well-respected underwriting institutions, Lawyers Title and Commonwealth, to remain strong, viable contributors to the Fidelity family of title insurance companies.
This has been an anxious and unsettling time for all of us. We will continue to update you as decisions are made. Please read the attached Q&A for employees; customer flyers are also provided for each channel.
I am deeply disappointed over the need to file for bankruptcy protection for the LandAmerica holding company and the 1031 company. The sale of our principal title operations to Fidelity offers our stakeholders the best result available in this brutal real estate, credit and capital market environment. The vast majority of our employees will have the opportunity to become part of the largest, most financially sound title insurance company in our industry as the next chapter of our history begins.
Theodore L. Chandler, Jr.
Chairman and CEO
p.s. I’m an idiot.