The Bruce Matson-LandAmerica saga appears to be coming to an end.
The imprisoned former Richmond attorney reached a settlement this week with the trustee overseeing the bankruptcy estate of the long-defunct Henrico-based title insurance company.
Matson, who was LandAmerica’s original bankruptcy trustee, is now serving a four-year federal prison sentence for stealing millions of dollars from the company’s bankruptcy wind-down fund.
That crime forced him to relinquish his role as trustee, as the court handed the title over to longtime Richmond attorney Ben Ackerly.
In January, as Matson sat in prison, Ackerly filed a lawsuit claiming Matson breached his fiduciary duty to the estate as a result of his crimes and sought a judgment forcing Matson to pay back at least $480,000.
That would have been in addition to more than $4 million Matson has already paid back into the LandAmerica trust after his theft was discovered.
But this week’s settlement, which awaits the court’s approval, will not result in any additional funds from Matson.
Instead, it calls for an end to the suit, for both sides to release any claims against one another and to bar both sides from making any additional related claims against the other in the future — all without Matson paying any more into the LandAmerica trust.
The deal was reached with the help of a mediator and after Matson threatened to sue Ackerly and his camp. The filing says the nature of the claims Matson threatened is unknown and that Ackerly denies that Matson has the right to any such claims, but it was still enough to help push the settlement through.
In his motion to approve the accord, Ackerly said that he concluded continued pursuit of the case wasn’t worth it financially for the estate.
“Simply put, the time and expense likely to be incurred in pursuing a judgment and collection on these claims, and defending against unspecified claims Matson has threatened to pursue against the successor trustee and his professionals, may lead to diminished recovery for beneficiaries and an attenuated payout period,” Ackerly told the court in an Oct. 24 filing.
The mediator was Judge Frank Santoro, a longtime federal bankruptcy judge from Hampton Roads. He investigated the collectability of any judgment Ackerly might win against Matson and found that the effort of trying to collect would eat into any leftover funds which could be distributed to beneficiaries of the trust.
The trust had around $3 million in its account as of Sept. 30, according to court records.
The settlement also calls for the trust to pay any fees owed to Matson’s guardian ad litem and those of the guardian’s attorney.
If approved at a hearing set for Nov. 15, the settlement would end a relationship between Matson and LandAmerica that began in November 2008 when the company toppled into bankruptcy.
Matson, as trustee, shepherded the case to a lauded and seemingly successful conclusion in 2015. All that was left was a $3 million wind-down fund set aside for any incidental expenses and loose ends.
Then in 2019, it was discovered that Matson had emptied the wind-down account. Ironically, the missing funds only came to light during the bankruptcy proceedings of LeClairRyan, the longtime Richmond law firm at which Matson worked for decades.
Matson tried to wriggle free from the controversy by returning the money in full, but in the process of explaining his conduct he lied to the bankruptcy court. That prompted criminal charges from the U.S. Attorney’s Office of obstructing an official proceeding. Matson ultimately admitted during the criminal proceedings that his theft from the estate began in 2015, earlier than initially thought.
He was sentenced last fall and is currently serving his time at FCI Morgantown, a minimum-security compound in West Virginia.
Ackerly is represented in the case by attorney Tyler Brown of Hunton Andrews Kurth.
Matson has been represented by the court-appointed guardian ad litem, Washington, D.C. attorney Stanley Samorajczyk.
Samorajczyk is represented in the matter by Roy Terry, formerly of Sands Anderson and now in his own practice in Richmond.
Matson also enlisted local attorney Bill Broscious to help in the settlement.
Matson fought to represent himself from prison, but Ackerly’s camp argued that he couldn’t reasonably do so and for a guardian to be appointed.
The settlement agreement includes a line stating that Matson still disputes the need for a guardian in the case.