Matson settlement with LandAmerica estate gets judge’s approval

Disgraced attorney Matson trying to get lower prison sentence

Bruce Matson, a now-disbarred Richmond attorney, is serving a prison sentence for stealing millions from a bankruptcy trust account. (BizSense file photos)

The path has been cleared to finally end the Bruce Matson-Land America saga.

Federal bankruptcy court Judge Kevin Huennekens last week approved a settlement between Matson and the bankruptcy estate of the long-defunct Henrico-based title insurance company.

The agreement effectively ends a legal scandal that began three years ago when Matson, a now-disbarred veteran Richmond attorney, was caught stealing millions of dollars from LandAmerica’s bankruptcy winddown fund while serving as the estate’s trustee. The theft led to the reopening of the closed case, Matson’s ouster as trustee and, ultimately, his federal prison sentence.

While Matson is now serving his time, the LandAmerica case has remained reopened as substitute trustee Benjamin Ackerly continued to investigate whether any additional money had gone missing or was owed to the estate.

This latest settlement relates to a lawsuit Ackerly filed against the imprisoned Matson in January, claiming he owed at least $480,000 in additional funds to the LandAmerica coffers on top of the more than $4 million Matson repaid since the theft was discovered.

After months of back-and-forth and Matson litigating the case from prison, the two sides reached an agreement that allows for the lawsuit to be dismissed without Matson paying any additional funds.

Ackerly, as stated in court records, concluded with the help of a mediator that the continued pursuit of the case wasn’t worth it financially for the estate, in part because the collectability of any additional funds from Matson was in doubt.

The accord was also reached after Matson threatened to sue Ackerly and his camp, though Ackerly denies that Matson had any claims to stand on.

As approved, the settlement 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.

Bruce Matson is serving a nearly four-year sentence at FCI Morgantown, a minimum-security compound in West Virginia.

With his business with Matson all but complete, there are still a few tasks Ackerly must finish before re-closing the LandAmerica estate and bringing a cleaner and theft-free end than that of Matson’s tenure as trustee.

Ackerly first would pay the legal fees of the guardian ad litem who was appointed on Matson’s behalf, as well as those of the guardian’s attorney, as called for in the settlement.

Ackerly would then work to distribute to creditors the leftover funds from the LandAmerica wind-down account, which totaled $2.96 million as of Oct. 31. Creditors must first be notified of the pending distribution and they’ll be given the option to opt in or out.

Tyler Brown, a Hunton Andrews Kurth attorney representing Ackerly in the case, told Huennekens at last week’s settlement hearing they would then look to promptly put the case fully to rest after the distribution, potentially before the end of the year.

“We need some closure on this,” Brown said during the hearing.

LandAmerica fell into bankruptcy in November 2008. 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, as substitute trustee, recovered $4.46 million from Matson.

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