A class of former LandAmerica Financial Group employees agreed to a $5 million settlement of stock-drop claims arising from LandAmerica’s 2008 bankruptcy, and have submitted the agreement for court approval. LandAmerica filed for bankruptcy following the 2008 collapse of its title insurance subsidiary. The complaint alleged that certain LandAmerica directors and officers breached their fiduciary duties by, among other things, (i) imprudently investing in LandAmerica stock even though they knew that its title insurance subsidiary was backed by inherently risky subprime mortgage loans, and (ii) concealing the truth about LandAmerica’s deteriorating condition. The value of LandAmerica stock in the company’s 401(k) plan fell from just over $28 million to $76,552.
The case is Borboa v. Chandler, E.D. Va Case No. 13-cv-00844.