Richmond, Virginia. The Trustee for the LandAmerica 1031 Exchange Services, Inc. Trust (“LES Trust”) has been investigating litigation regarding the auction rate securities (“ARS”) held by LandAmerica and monetizing the remaining ARS in a way that achieves maximum recovery to the exchangers. The Trustee’s efforts have resulted in an agreement with Citigroup Global Markets (“CGMI”) for them to pay $95.5 million to the LES Trust. The ARS that are the subject of this settlement are the $120,300,000 in ARS that are currently held by the LES Trust and which were sold by CGMI to LandAmerica. While negotiating and seeking approval of this settlement, the Trustee continues to evaluate monetizing the $50 million in principal amount of ARS underwritten by the Royal Bank of Canada (“RBC”) and sold to LandAmerica by SunTrust and pursuing the related litigation claims with respect to those ARS.
The Trustee, on behalf of the LES Trust, seeks entry of an order authorizing him, pursuant to Bankruptcy Rule 9019(a), to enter into the settlement with CGMI. The Trustee investigated LandAmerica’s claims against CGMI and participated in extensive settlement negotiations with CGMI leading to the settlement, which resolves all of the LES Trust’s claims against CGMI in exchange for CGMI’s agreement to purchase all ARS which the LES Trust holds and which CGMI sold to LES for $95.5 million. The ARS Litigation Committee (which is composed of exchangers) has approved the settlement.
After legal fees and other associated costs, the remainder of the recovery will be paid to the exchangers as described in the Plan. It is unknown at this time what will be the exact distribution to exchangers and when that will take place. The hearing on the settlement will be November 9, 2010 at 11 am EST. Ronald Page, PLC represents creditors in complex Chapter 11 Bankruptcy Cases.