The case will be heard at the U.S. District Courthouse in Richmond. (Photo by Michael Schwartz)
More than five years after its collapse, fallout from the ruins of former Richmond financial giant LandAmerica continues to bubble up in court.
The latest installment is a lawsuit filed in late December by a former LandAmerica employee seeking to blame the bankrupt company’s former top brass for allegedly mishandling its pension fund, which resulted in millions of dollars in losses for participants.
The suit was filed by Kerrie Borboa against 15 former LandAmerica executives and directors. The defendants include some big Richmond names, such as former LandAmerica chairman and chief executive Ted Chandler and former director Eugene Trani, who was previously president of Virginia Commonwealth University.
The case alleges that the defendants failed in their fiduciary duty to “prudently and loyally” manage the pension fund leading up to and during LandAmerica’s rapid demise in 2008.
![Click to read the lawsuit. [PDF]](/wp-content/uploads/2014/02/LandAmerica-pension-lawsuit.jpg "Lawsuit against LandAmerica execs revived 2")
Click to read the lawsuit. [PDF]
Borboa’s suit will look to force the bosses to potentially pony up to cover losses suffered by the pension fund. It will also seek to trigger insurance coverage that could still be in place to protect the insiders in such an instance.
A case with a similar goal 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. It initially sought $365 million in damages.
If such insurance coverage is not in place, the individual defendants could potentially have to open their wallets.
The case 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, according to the lawsuit.
It is asking for a jury trial to win the repayment of all money lost from the plan as a result of the alleged breaches. An exact figure of potential damages was not included in the suit.
Borboa’s suit illustrates how quickly LandAmerica stock fell from favor once its weaknesses were exposed.
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 $76,500. The company terminated its retirement plan in July 2009.
LandAmerica filed bankruptcy in November 2008. At its height, LandAmerica 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.
Borboa’s case also alleges that the 15 defendants failed to avoid inherent conflicts of interest in their oversight of the fund, as many of their pay packages were tied to the performance of LandAmerica stock.
The allegations claim violations of the federal Employee Retirement Income Security Act of 1974.
A nearly identical suit was filed two years ago with Borboa as the lead tenant. It was dismissed in August 2011 as legal claims in LandAmerica’s bankruptcy liquidation took precedent. The bankruptcy is ongoing.
Borboa is represented in the case locally by Charles Williams and James Skilling of Williams & Skilling. Her lead attorneys are a team from Kessler Topaz Meltzer & Check in Pennsylvania.
Kessler Topaz attorney Mark Gyandoh said the firm would not comment on the case.
The other defendants 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., Thomas G. Snead Jr. and Marshall B. Wishnack.
Scott Fredericksen, a Washington attorney with Foley & Lardner, is representing Chandler, Dorneman and Evans. He declined to comment.
Attorney Mark Chehy of Skadden, Arps, Slate, Meagher & Flom in Delaware is representing the 12 former directors. Chehy could not be reached for comment.
The defendants have not filed their response.
The case will be heard at the U.S. District Courthouse in Richmond. (Photo by Michael Schwartz)
More than five years after its collapse, fallout from the ruins of former Richmond financial giant LandAmerica continues to bubble up in court.
The latest installment is a lawsuit filed in late December by a former LandAmerica employee seeking to blame the bankrupt company’s former top brass for allegedly mishandling its pension fund, which resulted in millions of dollars in losses for participants.
The suit was filed by Kerrie Borboa against 15 former LandAmerica executives and directors. The defendants include some big Richmond names, such as former LandAmerica chairman and chief executive Ted Chandler and former director Eugene Trani, who was previously president of Virginia Commonwealth University.
The case alleges that the defendants failed in their fiduciary duty to “prudently and loyally” manage the pension fund leading up to and during LandAmerica’s rapid demise in 2008.
Click to read the lawsuit. [PDF]
Borboa’s suit will look to force the bosses to potentially pony up to cover losses suffered by the pension fund. It will also seek to trigger insurance coverage that could still be in place to protect the insiders in such an instance.
A case with a similar goal 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. It initially sought $365 million in damages.
If such insurance coverage is not in place, the individual defendants could potentially have to open their wallets.
The case 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, according to the lawsuit.
It is asking for a jury trial to win the repayment of all money lost from the plan as a result of the alleged breaches. An exact figure of potential damages was not included in the suit.
Borboa’s suit illustrates how quickly LandAmerica stock fell from favor once its weaknesses were exposed.
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 $76,500. The company terminated its retirement plan in July 2009.
LandAmerica filed bankruptcy in November 2008. At its height, LandAmerica 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.
Borboa’s case also alleges that the 15 defendants failed to avoid inherent conflicts of interest in their oversight of the fund, as many of their pay packages were tied to the performance of LandAmerica stock.
The allegations claim violations of the federal Employee Retirement Income Security Act of 1974.
A nearly identical suit was filed two years ago with Borboa as the lead tenant. It was dismissed in August 2011 as legal claims in LandAmerica’s bankruptcy liquidation took precedent. The bankruptcy is ongoing.
Borboa is represented in the case locally by Charles Williams and James Skilling of Williams & Skilling. Her lead attorneys are a team from Kessler Topaz Meltzer & Check in Pennsylvania.
Kessler Topaz attorney Mark Gyandoh said the firm would not comment on the case.
The other defendants 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., Thomas G. Snead Jr. and Marshall B. Wishnack.
Scott Fredericksen, a Washington attorney with Foley & Lardner, is representing Chandler, Dorneman and Evans. He declined to comment.
Attorney Mark Chehy of Skadden, Arps, Slate, Meagher & Flom in Delaware is representing the 12 former directors. Chehy could not be reached for comment.
The defendants have not filed their response.