Printer Friendly

LAWYERS TITLE CORPORATION POSTS FIRST QUARTER LOSS AFTER DREXEL CASE SETTLEMENT

 RICHMOND, Va., April 20 /PRNewswire/ -- Lawyers Title Corporation (NASDAQ: LTCO), the parent corporation of Lawyers Title Insurance Corporation (LTIC), headquartered in Richmond, reported a net loss of $4.17 million for the quarter ended March 31, 1993, including the effect of a one-time $6.75 million settlement of the previously disclosed Drexel litigation.
 The net loss, which included $2.9 million of capital gains, amounted to 64 cents per share. During the comparable 1992 period, net income, including capital gains of $5.3 million, was $0.7 million, or 12 cents per share. Per share amounts have been revised to reflect a three-for- two stock split which will be effective on May 6, 1993, to shareholders of record on April 15, 1993.
 The revenues for the quarter ended March 31, 1993, were $103.6 million as compared to revenues of $105.2 million for the same period in 1992. Capital gains of $2.9 million and $5.3 million were included in revenues for the 1993 and 1992 periods respectively.
 The operating margin, before claims and investment income, improved to 5.3 percent in the 1993 period, compared to 5.1 percent in the 1992 period. Also, during the first quarter of 1993, the claims provision, excluding the Drexel settlement, was 10.7 percent of title revenues, compared to 13.3 percent reported in the first quarter of 1992.
 New title orders opened by the company's branch operations during March 1993 were over 35,000, or 30 percent ahead of new orders opened in March 1992. This was driven by renewed high levels of residential mortgage refinancing activity, as well as increased levels of home purchasing activity.
 The Drexel case involved litigation brought by Executive Life Insurance Company through John Garamendi, the insurance commissioner of California, who is serving as the rehabilitator (ELIC), and DBL Liquidating Trust, the successor-in-interest to Drexel Burnham Lambert (Drexel), in the United States District Court for the Southern District of New York. Investors in over 500 limited partnerships created from 1973 to 1983 had brought various class and derivative action lawsuits against ELIC and Drexel in 1988 concerning investment losses in the partnerships which Drexel had financed in the mid-1980s. In 1992, ELIC and Drexel brought suit against LTIC alleging title policy defense and indemnity obligations on the over 500 title insurance policies issued to insure mortgage liens, in attempting to recoup monies ELIC and Drexel had paid in the investors' litigation. The suit against LTIC alleged compensatory damages of $62 million and punitive damages of $186 million.
 On Monday, the opening day of the trial, the parties agreed to a settlement in principle which is subject to approval by the California Superior Court supervising the rehabilitation of ELIC. Under the proposed settlement, LTIC has agreed to pay $6.75 million in full settlement of all claims by any and all alleged insureds. In addition, Drexel, ELIC and all insureds are required to surrender the title


policies previously issued to them, thereby assuring LTIC of no future contingent liabilities.
 While the company believes that it had strong defenses to the alleged claims, the settlement is appropriate given the extreme complexity of the legal and factual issues presented by the case and the uncertainties attendant to a jury's resolution of those issues. Additionally, without settlement, the company would have expected to incur very significant expenses associated with the continuing litigation and appeals. With the settlement, the matter is concluded and all of the financial effects are reflected in this first quarter earnings release.
 The district court judge presiding over this matter ordered that the agreement of settlement must be kept under seal, thereby prohibiting any further comment by any of the parties to the settlement.
 LAWYERS TITLE AND SUBSIDIARIES
 Summary of Operations
 (In thousands, except per share data.
 Per share amounts reflect stock split. See text.)
 Three Months Ended March 31,
 1993 1992
 Revenues $103,601 $105,241
 Operating income (loss) before income taxes (4,170) 741
 Net income (loss) (4,170) 741
 Earnings (loss) per share ($0.64) $0.12
 Average shares outstanding 6,472 6,145
 -0- 4/20/93
 /CONTACT: H. Randolph Farmer, 804-281-6855, G. William Evans, 804-281-6752, or Russell W. Jordan, 804-281-6793, all of the Lawyers Title Corporation/
 (LTCO)


CO: Lawyers Title Corporation ST: Virginia IN: INS SU: ERN

DC-TW -- DC040 -- 8349 04/20/93 18:02 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 20, 1993
Words:726
Previous Article:MARTIN MARIETTA REPORTS 6.6 PERCENT EPS INCREASE BEFORE ACCOUNTING CHARGE
Next Article:HERITAGE BANKCORP, INC. OF TAYLOR, MICH. ANNOUNCES QUARTERLY RESULTS
Topics:


Related Articles
LAWYERS TITLE CORPORATION REPORTS RESULTS
LAWYERS TITLE CORPORATION ANNOUNCES EARNINGS
LAWYERS TITLE CORPORATION ANNOUNCES THIRD QUARTER RESULTS
LAWYERS TITLE ANNOUNCES STOCK SPLIT, REPORTS RESULTS
LAWYERS TITLE CORPORATION REPORTS SECOND QUARTER EARNINGS
LAWYERS TITLE CORPORATION REPORTS EARNINGS
INTEGON CORPORATION ANNOUNCES FIRST QUARTER 1994 RESULTS NONSTANDARD AUTO PREMIUMS RISE 25.4 PERCENT
LAWYERS TITLE CORPORATION ANNOUNCES FIRST QUARTER RESULTS
LAWYERS TITLE CORPORATION ANNOUNCES THIRD QUARTER INCREASE IN EARNINGS
Stewart Information Services Corporation Reports First Quarter Results.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters