LandAmerica’s future is now, officially, in doubt (again). Going from bad to worse ….

11.26.08 >> Title insurer LandAmerica Financial Group Inc. said Wednesday it will file for bankruptcy protection, while competitor Fidelity National Financial Inc. said it will acquire three of LandAmerica’s subsidiaries.

The bankruptcy filing of LandAmerica’s holding company and subsidiary LandAmerica 1031 Exchange Services Inc. and sale of the subsidiaries comes just days after Jacksonville, Fla.– based Fidelity National canceled an agreement to purchase all of Richmond, Va.– based LandAmerica.

That deal called for Fidelity National to acquire LandAmerica in an all-stock acquisition for about $128.4 million.A subsidiary of Fidelity National, Chicago Title Insurance Co., will acquire Commonwealth Land Title Insurance Co. for $158.6 million. Fidelity National Title Insurance Co., another of Fidelity National’s units will acquire Lawyers Title Insurance Corp. and United Capital Title Insurance Co. for $139.4 million.

The units Fidelity National is purchasing remain solvent and continue to operate. The acquisitions are expected to close as early as late December.

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11.25.08 >> News Flash: As reported by InmanNews today, LandAmerica Financial Group Inc. faces “serious liquidity constraints” now that rival Fidelity National Financial Inc. has backed out of a deal to acquire the troubled title insurer, according to analysts at Fitch Ratings.

The impact: The rating agencency subsequently slashed LandAmerica’s debt rating and the insurer financial strength ratings of its subsidiaries. LandAmerica, which reported a $599.6 million third quarter loss, has breached its covenants on $250 million in bank debt, and can’t access $290 million invested in auction-rate securities as part of its 1031 exchange business, Fitch analysts said.

So, what is next? Several analysts have suggested LandAmerica may pursue bankruptcy protection in light of the failed merger, the Wall Street Journal reported in an article Monday. Stay tuned …..

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11.21.08 >> In an unexpected move that foreshadows huge issues lurking in the real estate industry, Fidelity and LandAmerica both issued terse statements at 8 p.m. Eastern Time Friday, November 21, 2008 saying Fidelity had exercised its right to back out of the deal during a due diligence period.

This development casts doubt on LandAmerica’s long-term prospects. Read about all the details ….

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