Tell them that you like it this way

My goodness, do I feel like an oaf. I’ve been blaming the Hauptmans all this time and it was really the fault of CoAmerica and First American Title that all the good title folks of California, Texas and Arizona lost their jobs last week. Wow! That’s embarrassing! It’s good to see that Jerry really cared about the employees. I sooo have to quote this part:

After exploring and then concluding that an orderly shut down was not possible, mainly because we could not ask employees to work when we had no means to pay them, we immediately informed all relevant parties including employees, regulators and First American that 161 locations in California, Arizona and Texas would be immediately shut down.

Uh, Jerry, you didn’t pay them. It’s good to see he didn’t care about financial gain either and was just being a responsible fiduciary for the stakeholders of Mercury Companies. (Hey wouldn’t FATCO be one of those?) Does anybody really think that CoAmerica “unexpectedly declared the entire $40 million immediately due and payable”? Come on Jerry, that’s not how anybody does business, even with the likes of you. Supposedly the FNF deal was worth “millions” more than FAF was offering. Did I misread this thing? It’s only a five million dollar deal. The added value seems to be in the dismissal of the FNF lawsuits. Can’t wait to hear Oldtitleguy and Skip’s read on that one. Everyone else please feel free to ring in on it. I just didn’t see “millions” more than anything FAF was offering.

It’s a ton of reading, but Hell, I’m unemployed, so reading court documents makes it feel like I have a job. I skimmed over the exhibits to the Stock Purchase Agreement and didn’t notice the list of employees retained. Iguessimfired didn’t miss that, probably because their name didn’t appear on the list. I hope it’s not a complete list. And I hope all will be ok for you and anyone else who isn’t on the list. It appears to be backroom staff. You can know that the gentle readers of PBE wish you well. Most of us have been there, or are there right now.

Here’s an interesting take from yesterday’s Inman. Appears to be prior to the court docs flying. We’ll see what today brings. It’s been an interesting two weeks. I’m expecting Scully and Mulder to show up any minute now.

13 comments for “Tell them that you like it this way

  1. OldTitleGuy
    August 8, 2008 at 10:20 am

    One wonders if the dismissal of the SoCal lawsuit is going to be universal or only as to Mercury defendants. If it’s not universal, the individuals and Investors Title may be left swinging in the breeze. If Investors is dismissed, then the Alliance bankruptcy trustee has something to sell for the benefit of the creditors. Wonder if Jerry is going to bid? First American already owns 20% of Investors, so that would be an interesting marriage.
    In JH’s declaration, he states that Mercury holds significant funds in deferred compensation and benefits funds. Wonder how much of that is his? That may be good news for some state-level managers who may have deferred compensations built into their contracts.

  2. Skip-itty-doodah
    August 8, 2008 at 11:42 am

    OldTitleGuy I was wondering the same thing about the lawsuit against any remaining pricipals?..But you cannot squeeze blood out of a turnup or the unemployed. I’d guess they’d abandon the case because the cost to get an uncollectable judgement might not be worth the trouble. I also agree on your comment about Jerry coming through the back door for a second time. I had thought with Alliance going under would he possibly retain (or bid) on the essential assets and then resurface as Brand “X” somewhere in California. I find it curious that all of Colorado’s value was 5 mil.? I realize the price was set for a quick sale…but I’d guess that Bill will still only keep the portions that show true on-going potential and eliminate a ton of fat. Comerica pulling the plug?…I don’t buy that. They’ve had a substancial relationship which would mean they’d have had substancial correspondence prior to any move this harsh or sudden? Fox and Mulder indeed! I’d like to hear what Comerica has to say?

    Just for fun lets look at some of the now vacant assets from the past 24 months or so:

    New Century
    United Title (First Calif.)
    Gateway (So. Cal.)
    National Alliance (NV)
    Liberty?
    Security?
    Ticor (CA)
    Alliance
    Financial
    Investors
    LFC
    I’m sure I’ve missed a few…However it looks like anyone looking to expand might be able to hit some key markets at a substancially reduced investment?.

    American might be a huge benefactor of the recent or upcoming events…

  3. OldTitleGuy
    August 8, 2008 at 12:18 pm

    American Title has resurfaced in SoCal with Mike Lowther, Wayne Diaz, and Chris White seeming to be the major players. I think they are 40% owned by Fidelity.
    Nations Title is operating in SoCal, but are having their struggles.
    I really wonder who is going to pick up the Financial people in Sacramento. They were doing pretty well, and MaryLou seems to be a good manager, and David Simmons is a good title guy.
    LandAm seems to have bet the SoCal market on Southland Title, doing away with the other brands. I don’t know about NorCal.
    If Fidelity can get a judgment against Investors it would certainly be a big step towards acquiring them. Unsubtantiated rumor is that Investors is no longer allied with Mercury. There are a bunch of still-employed individuals named in that suit, lord only knows what their assets are like and whether or not they have indemnification from Mercury built into their contracts.

  4. Skip-itty-doodah
    August 8, 2008 at 1:04 pm

    American is in NorCal also and if the scuttlebutt is of any value Bill Foley acquires LandAm (Commonwealth in NorCal) opening the door for American to expand quickly in a wide market….a typical Bill move. Is Ticor still alive in SoCal?…maybe they split the acquisistion and rebrand Ticor and American depending upon the region?

    Any Alliance/Financial managers out there who had contracts…wish to weigh in on the indemnity clause question???

  5. Wine Dog
    August 8, 2008 at 1:11 pm

    Interesting. I’m hearing that LandAm eats the spun off version of FATCO. If FNF then eats LFG…big fish, little fish…

  6. OldTitleGuy
    August 8, 2008 at 1:26 pm

    Actually, Foley is the only one who has been able to keep multiple brands working as they should in SoCal. Yep Ticor is still open. I suspect that American is a different sort, in that it is not purely a FNF subsidiary.

  7. EO in hell
    August 8, 2008 at 4:22 pm

    Wine Dog, you have mail!

  8. EO in hell
    August 8, 2008 at 4:32 pm

    So FNF eats Landam or Landam eats FATCO or both? If Landam eats FATCO then FNF eats Landam a HUGE bump in market share for Mr. Foley. Sounds illegal to me 😉 Doubt FATCO would deal directly with FNF after the Colorado debacle earlier this week.

  9. titleguy
    August 8, 2008 at 5:35 pm

    Of course the FNF sale includes dropping all the suits with Mercury. Those cases included naming individuals the cases were not filed separately, you can’t release them and then retain your suit against individual parties.

    Yes the trustee can sell ITC for the benefit of the creditors. Jerry buying it is a joke, he has caused the largest fallout in the history of california title insurance, even Ticor’s BK was smooth compared to this, there is no way the DOI would approve a change in control of the license to include any Hauptman. The reason behind Jerry selling to FNF was to try and get out from under the litigation, there was less than 3 million in cash left in Mercury after Comerica pulled their funds. Good luck to any contingency fee attorneys chasing that, including the labor board and the State of California.

    God Bless anyone with any money in the deferred comp program, that is the same as a pension program those assets now belong to FNF, they are not held in trust and you will not get paid.

    As far as Landam, FNF and FAF go, and who eats who, according to the financials, ORI has been acquiring Landam stock and now holds roughly 10% that should buy them a seat on the board. Think about it.

    ITC is now longer affliated with Mercury they were severed with the Alliance BK on June 5th.

    About Comerica pulling the plug, Mercury had broken 6 of the convinents of the line, within 5 weeks of it being renegotiated after the Alliance BK, buy it, they were smart.

  10. Skip-itty-doodah
    August 8, 2008 at 6:01 pm

    good information. So was the violation of the Comerica LOC term by design? In anticipation of this. T bail out, to drop the ball so quickly in such a short period of time sounds planned. Certainly Mercury saw this day coming month ago.

  11. titleguy
    August 8, 2008 at 6:16 pm

    You give people way too much credit, if anything, Jerry couldn’t believe they would pull the line. He had gotten away with too much for too long.

  12. Skip-itty-doodah
    August 8, 2008 at 6:18 pm

    I just caught this tid-bit that North American in Santa Clara has taken on Jim Cortese (Financial Santa Clara) as their county manager. I know NATCO had been falling off the radar for a while. Perhaps Jim can breath some life into it? I am surprised that it happened so quickly..did they look at all the usual suspects and Jim was the pick or was it the quick kill with a large people coming with him? either way I hope it means more people have jobs regardless of the potential politics.

  13. OldTitleGuy
    August 8, 2008 at 11:45 pm

    Unless I’m badly mistaken, there shouldn’t be a problem dismissing individual defendants in an action without affecting the status of other defendants. I think I’d have to take a look at the complaint(s), and I’m unwilling to pay for it(them).

    In JH’s declaration concerning the sale: “In addition, Mercury holds substantial cash that because of its nature, it did not try to use as working capital. In particular, Mercury hold $13 million in a nonqualified deferred compensation plan (which is property of Mercury). It has also overfunded its health and benefits plan by approximately $4 million.”
    That’s verbatim, including the missing ‘s’.

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