A class of former LandAmerica Financial Group employees agreed to a $5 million settlement of stock-drop claims arising from LandAmerica’s 2008 bankruptcy.
According to the Proskauer law firm, LandAmerica filed for bankruptcy following the 2008 collapse of its title insurance subsidiary. The complaint alleged that certain LandAmerica directors and officers breached their Employee Retirement Income Security Act (ERISA) fiduciary duties by, among other things, (1) imprudently investing in LandAmerica stock even though they knew that its title insurance subsidiary was backed by inherently risky subprime mortgage loans, and (2) concealing the truth about the firm’s deteriorating condition.
During the class period of the lawsuit, the value of LandAmerica stock in the company’s 401(k) plan fell, from just more than $28 million, to $76,552.
The Pension Benefit Guaranty Corporation (PBGC) previously took over the defined benefit pension plan from the real estate services firm based in Glen Allen, Virginia, following its bankruptcy.
The settlement agreement has been submitted for court approval. The case is Borboa v. Chandler, E.D. Va Case No. 13-cv-00844.