LandAmerica bankruptcy case coming to a close – for good this time

Bruce Matson oversaw the untangling of LandAmerica’s collapse.

A select few creditors of the LandAmerica Financial Group bankruptcy estate are getting a little extra recompense. The money comes eight years after the case was brought to a seemingly successful conclusion, only to be revived because of the former trustee’s theft of millions of dollars.

Checks were mailed out this month to disburse the last of the funds from a wind-down account that dates to the original closure of the LFG case in 2015.

Those funds, just shy of $3 million, were to be held until the expiration of the original wind-down period in 2021. But in 2019, that account was found to have been emptied. Bruce Matson, the veteran Richmond attorney and longtime bankruptcy trustee who oversaw the complicated LFG case, was found to be the culprit of the missing funds.

Matson fessed up to the crime only after the money was discovered missing during the course of the separate bankruptcy case of his longtime law firm, LeClairRyan.

He paid the money back in full to the LFG estate but still was charged and convicted of the theft and sentenced in November 2021 to 44 months in federal prison.

Bruce Matson’s law license was revoked as a result of the LandAmerica saga. (BizSense file)

A substitute trustee, veteran Richmond attorney Ben Ackerly, was brought in to unwind Matson’s doings and last month told the bankruptcy court it’s time to finally put the case to rest once again – this time for good.

U.S. Bankruptcy Judge Kevin Huennekens, who has presided over the LFG case since the once mighty Henrico-based title insurance company collapsed in 2008, approved the disbursement process April 24.

Ackerly’s camp began sending out checks May 8, divvying up $2.42 million in remaining wind-down funds repaid by Matson.

A group of 26 of the company’s largest creditors are to receive checks of varying amounts but no less than $2,500 each. That total will spend down 97 percent of the leftover funds. The remainder will go to 154 other creditors. Those creditors all last received a check from the estate in 2015.

Ackerly’s camp also set aside $145,000 for its own wind-down budget, mainly to pay financial and tax advisers, and legal and other expenses.

Ackerly, through attorney Tyler Brown of Hunton Andrews Kurth, declined to comment for this story.

The final step in the process once the checks are all out is to file final tax returns for the estate and close the case with as close to a zero balance as possible. Any leftover funds would be donated to a charity of the trustee’s choosing.

That final re-closing of the case finally would bring an end to a bankruptcy process that was hailed at the time as a success, given the money involved and the complexity of LandAmerica’s operations.

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