LandAmerica’s big bosses are off the hook again.
A $5 million settlement was officially approved last week to resolve a long-standing class-action lawsuit against former heads of the collapsed Richmond financial firm.
The case was born out of two separate suits filed by a pair of disgruntled employees who blamed 15 former LandAmerica Financial Group executives and directors for allegedly mishandling the company’s pension fund as the firm faltered and failed.
Similar to the end of a case filed against the group of insiders in 2012 by the trustee overseeing LFG’s bankruptcy, this $5 million settlement was reached after triggering an insurance policy that was in place to cover board members and executives in such an instance.
It allows the defendants, who denied liability throughout the case, to end the matter without admitting any wrongdoing.
The case was closed July 22, and the court appointed California attorney Nicholas L. Saakvitne to administer the settlement funds and oversee distribution. The class included all participants in the LFG Savings and Stock Ownership Plan between Feb. 7, 2008 and July 31, 2009. Court documents indicate that nearly 1,000 class members had been identified thus far.
The attorneys that represented the class were awarded $1.4 million in fees and $152,000 in expense reimbursement, amounting to about 28 percent of the total payout.
Former LandAmerica employees Kerrie Borboa, Timothy O’Grady and Bertrand Francis were the lead plaintiffs. They each were awarded $5,000 for their contributions to the case.
The defendants in the case were former LandAmerica CEO Ted Chandler; former 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.; Eugene Trani; Thomas G. Snead Jr.; and Marshall B. Wishnack.
The case alleged that the 15 defendants failed to avoid inherent conflicts of interest in their oversight of the pension fund and its heavy reliance on LandAmerica stock, as many of their pay packages were tied to the performance of the company’s shares. The lawsuit claims violations of the federal Employee Retirement Income Security Act of 1974.
LandAmerica filed for bankruptcy in November 2008. At its height, the company 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.
At the end of 2007, the pension 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 just $76,500. The company terminated its retirement plan in July 2009.
The plaintiffs and the class were represented by attorneys from Kessler Topaz Meltzer & Check in Radnor, Pennsylvania. The defendants were represented by attorneys with Foley & Lardner in Washington, D.C., and from Skadden, Arps, Slate, Meagher & Flom.
Calls to several of the attorneys were not returned by press time.
Stay tuned to BizSense this week for an update on how the largest piece of LandAmerica’s bankruptcy is finally nearing a conclusion.
LandAmerica’s big bosses are off the hook again.
A $5 million settlement was officially approved last week to resolve a long-standing class-action lawsuit against former heads of the collapsed Richmond financial firm.
The case was born out of two separate suits filed by a pair of disgruntled employees who blamed 15 former LandAmerica Financial Group executives and directors for allegedly mishandling the company’s pension fund as the firm faltered and failed.
Similar to the end of a case filed against the group of insiders in 2012 by the trustee overseeing LFG’s bankruptcy, this $5 million settlement was reached after triggering an insurance policy that was in place to cover board members and executives in such an instance.
It allows the defendants, who denied liability throughout the case, to end the matter without admitting any wrongdoing.
The case was closed July 22, and the court appointed California attorney Nicholas L. Saakvitne to administer the settlement funds and oversee distribution. The class included all participants in the LFG Savings and Stock Ownership Plan between Feb. 7, 2008 and July 31, 2009. Court documents indicate that nearly 1,000 class members had been identified thus far.
The attorneys that represented the class were awarded $1.4 million in fees and $152,000 in expense reimbursement, amounting to about 28 percent of the total payout.
Former LandAmerica employees Kerrie Borboa, Timothy O’Grady and Bertrand Francis were the lead plaintiffs. They each were awarded $5,000 for their contributions to the case.
The defendants in the case were former LandAmerica CEO Ted Chandler; former 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.; Eugene Trani; Thomas G. Snead Jr.; and Marshall B. Wishnack.
The case alleged that the 15 defendants failed to avoid inherent conflicts of interest in their oversight of the pension fund and its heavy reliance on LandAmerica stock, as many of their pay packages were tied to the performance of the company’s shares. The lawsuit claims violations of the federal Employee Retirement Income Security Act of 1974.
LandAmerica filed for bankruptcy in November 2008. At its height, the company 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.
At the end of 2007, the pension 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 just $76,500. The company terminated its retirement plan in July 2009.
The plaintiffs and the class were represented by attorneys from Kessler Topaz Meltzer & Check in Radnor, Pennsylvania. The defendants were represented by attorneys with Foley & Lardner in Washington, D.C., and from Skadden, Arps, Slate, Meagher & Flom.
Calls to several of the attorneys were not returned by press time.
Stay tuned to BizSense this week for an update on how the largest piece of LandAmerica’s bankruptcy is finally nearing a conclusion.