September 12, 2011. The Trustee for the LandAmerica 1031 Exchange Services, Inc. Trust (“LES Trust“) has filed a motion to approve two settlements in the case. The first is a settlement with one of the insurers, Illinois Union Insurance Company (“Illinois Union”), which proposes that Illinois Union pay $9,000,000.00 (policy limit is $10,000,000.00 per claim) to settle its liability in the LandAmerica case. The second is a settlement with the Trustee for the LandAmerica Financial Group, Inc. Trust (“LFG Trust”) as to how the insurance proceeds are to be shared between the trusts. The LES Trust proposes to share recoveries from the insurance companies as follows:
- The LES Trust shall control all claims and causes of action related to LandAmerica 1031 Exchange Services, Inc. (“LES”), despite the fact that such claims or causes of action may also relate to LandAmerica Financial Group, Inc. (“LFG”), against insurers that issued, subscribed, otherwise have coverage obligations with respect to the 2008 E&O Policies.
- The $9,000,000.00 Illinois Union settlement, net of expenses and attorneys’ fees incurred in connection with the recovery, shall be allocated 75% to the LES Trust and 25% to the LFG Trust.
- Net proceeds of the London Policy (which has a $50 million aggregate limit of liability) shall be allocated 90% to the LES Trust and 10% to the LFG Trust for the first $10 million of net proceeds, and 100% to the LES Trust thereafter.
Objections to these proposed settlements are to be filed by September 15, 2011 and the Bankruptcy Court hearing on the settlement motion will be held September 22, 2011 at 10 a.m. Ronald Page, PLC represents creditors in complex Chapter 11 bankruptcy cases.