E&O Insurance Coverage Settlement
Wednesday, 25 April 2012 19:17
The Trustee is pleased to report that at the hearing in Richmond, VA on April 19, 2012, Judge Huennekens approved the motion for settlement with the E&O insurance carriers. The original hearing was scheduled for February 23, 2012 but was postponed so as to allow time for a resolution with The Title Companies who had objected to the settlement. A settlement was reached wherein the Underwriters agreed to pay over to The Title companies the balance of the insurance policies ($3.2 million) with the objection being withdrawn and the parties exchanging mutual releases. The Title companies and the Class settle with The Title companies paying $11 million to the Class and class counsel capping its fee request at 25% of $9 million.
The next step in this matter is for the Class reps (who are seeking to certify the Class) to seek approval in the Class Court in California to effectuate a settlement with the Class. Once the hearing date is set, we will be able to update you accordingly as to when the anticipated distribution will be made.
Prior to this settlement the LES Trustee had distributed 70% to commingled exchangers on their lost principal (having already paid segregated exchangers in full). The settlement provides another 19% which will bring LES to 89% when distributed. The Class money will bring the exchangers another 4.5%. The LES Trustee still has more than $9 million cash and is reviewing whether to bring one more major claim. Thus with the cash and the Class amount, the commingled exchangers will be at about 97%.
Since our appointment, we have recovered about $190 million, with about $146 million for LES and has transferred an additional $39.4 million to the LFG Trustee. The LES Trustee has not yet received any funds from the LFG Trustee.
We appreciate your continued support and are pleased to be able to report the progress and achievements made in this matter.
Best Regards,
LES Liquidation Trust
Jerry McHale,Jr.
Jerry McHale
Liquidating Trustee
Oversight Committee Newsletter #5
Tuesday, 10 April 2012 10:51
Fellow Exchangers:
If you have not already done so, please visit the web site www.lestrustee.com and read the statement posted by Jerry McHale, the LES Trustee, concerning the recent settlement with the Errors and Omissions insurance companies and others. While the statement is accurate and somewhat complicated, we wanted to highlight the results for exchangers.
If and when both the class action settlement and the E&O settlements are approved in late September, two distributions will be made, one to the Class 6 Unsecured Commingled exchangers for approximately 18% and a separate and distinct settlement payment from the class action settlement anticipated to be in the 4.5% range. Anyone who has settled with any of the Title Companies owned by LandAmerica Financial will not participate in the class actions settlement payment. The E&O settlement can not be paid out unless and until the class action court approves of the class action settlement.
The LES Trustee and his team will reach a total of 89% recovery if this latest settlement is approved. An additional 4.5% will flow to most commingled exchangers through the class settlement.
While nothing is certain until the court approves it, the committee wants to heartily congratulate Jerry McHale, Mike Devorkin and Richard Shore on achieving a very significant settlement for the exchangers during a complex and lengthy negotiation with numerous parties.
Activity continues in pursuing additional recoveries.
Sincerely,
The LES Trust Oversight Committee