Ga. company wants to appeal decision in LandAmerica bankruptcy

A Georgia company that placed $27.8 million with LandAmerica 1031 Exchange Services Inc. wants to appeal a bankruptcy court decision over ownership of the money.

Millard Refrigerated Services Inc. has filed a request in U.S. Bankruptcy Court in Richmond to appeal a ruling that the money belongs to LandAmerica's estate.

The company is asking to bypass U.S. District Court and head directly to the 4th U.S. Circuit Court of Appeals, also in Richmond, in order to speed up proceedings.

The appeal, the sale of five subsidiaries and other matters such as attorneys fees are on the hearing docket today before Bankruptcy Judge Kevin R. Huennekens.

The exchange company and its parent, Henrico County-based LandAmerica Financial Group Inc., filed for Chapter 11 bankruptcy in November.

The unsecured creditors committees for both companies have filed an objection to the appeal request, claiming it would hinder rather than advance the case, according to court documents.

Customers placed their money with LandAmerica 1031 Exchange Services after selling investment property as a way to defer capital gains taxes while looking for replacement property in which to invest.

At the time of the filing, the exchange company owed $419.2 million to about 450 customers.

Huennekens ordered test cases be tried for the different types of exchange agreements in order to set precedents for similar claims.

The Millard complaint was the first case heard, and the judge ruled the money belonged to the estate, which meant it could be divided up among creditors. Huennekens later issued a similar ruling for three other test cases.

Cantor Arkema attorney Kevin J. Funk, who represents two test-case clients, said he is watching the Millard case and weighing appeal options.

Also today, Huennekens will rule on the sale of stock in six subsidiaries that could bring in nearly $28 million.

"That's good," Funk said. "It enlarges the estate."

LandAmerica held a two-day auction earlier this week to sell off subsidiaries LandAmerica Home Warranty Co., LandAmerica Property Inspection Services Inc., Buyers Real Estate Services Inc. and Residential Property Maintenance Inc.

The bids range in value between $12.2 million and $12.6 million and belong to Buyers Protection Group Inc. and Fidelity National Financial Inc., which previously bought LandAmerica's title insurance subsidiaries.

Another stock sale for LoanCare Servicing Center Inc. and LC Insurance Agency Inc. fetched between $16.2 million and $16.3 million at auction from two bidders -- Norfolk-based Portfolio Recovery Associates Inc. and Fidelity, based in Jacksonville, Fla.

Contact Emily C. Dooley at (804) 649-6016 or .