B238154
9710115
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- Commissioners:
- Robert Pitofsky, Chairman
Mary L. Azcuenaga
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
In the Matter of
LANDAMERICA FINANCIAL GROUP, INC., a corporation.
Docket No. C-3808
DECISION AND ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of the acquisition by the respondent LandAmerica Financial Group, Inc.,
formerly known as Lawyers Title Corporation, of certain assets of Reliance Group Holdings,
Inc., and the respondent having been furnished thereafter with a copy of a draft of
complaint which the Bureau of Competition proposed to present to the Commission for its
consideration and which, if issued by the Commission, would charge the respondent with
violation of the Federal Trade Commission Act and the Clayton Act; and
The respondent and counsel for the Commission having thereafter executed an agreement
containing a consent order, an admission by respondent of all the jurisdictional facts set
forth in the aforesaid draft of complaint, a statement that the signing of said agreement
is for settlement purposes only and does not constitute an admission by respondent that
the law has been violated as alleged in such complaint, and waivers and other provisions
as required by the Commission's Rules; and
The Commission having thereafter considered the matter and having determined that it
had reason to believe that the respondent has violated the said Acts, and that a complaint
should issue stating its charges in that respect, and having thereupon accepted the
executed consent agreement and placed such agreement on the public record for a period of
sixty (60) days, now in further conformity with the procedure described in Section 2.34 of
its Rules, the Commission hereby issues its complaint, makes the following jurisdictional
findings and enters the following order:
- LandAmerica Financial Group, Inc., formerly known as Lawyers Title Corporation, is a
corporation organized, existing and doing business under and by virtue of the laws of the
Commonwealth of Virginia with its office and principal place of business located at 6630
West Broad Street, Richmond, Virginia 23230.
The Federal Trade Commission has jurisdiction of the subject matter of
this proceeding and of the respondent, and the proceeding is in the public interest.
ORDER
I.
IT IS ORDERED that, as used in this order, the following definitions shall
apply:
A. "Respondent" or "LTC" means LandAmerica Financial Group, Inc.,
formerly known as Lawyers Title Corporation, its directors, officers, employees, agents,
representatives, predecessors, successors, and assigns; its subsidiaries, divisions,
groups and affiliates controlled by LandAmerica Financial Group, Inc., and the respective
directors, officers, employees, agents, representatives, successors, and assigns of each.
B. The term "Reliance Group" means Reliance Group Holdings, Inc., its
directors, officers, employees, agents, representatives, predecessors, successors, and
assigns; its subsidiaries, divisions, groups and affiliates controlled by Reliance Group
Holdings, Inc., and the respective directors, officers, employees, agents,
representatives, successors, and assigns of each.
C. "Commission" means the Federal Trade Commission.
D. The term "title plant" means a privately owned collection of records
and/or indices regarding the ownership of and interests in real property. The term
includes such collections that are regularly maintained and updated by obtaining
information or documents from the public records, as well as such collections of
information that are not regularly updated.
E. The “Acquisition” means the acquisition of the title insurance operations
of Reliance Group by LTC, in exchange for the acquisition by Reliance Group of a minority
voting interest in LTC and other consideration, as described in the Amended and Restated
Stock Purchase Agreement dated as of December 11, 1997.
II.
IT IS FURTHER ORDERED that:
A. Respondent shall divest, absolutely and in good faith, within six months from the
date the agreement containing consent order is signed by respondent, all of its rights,
title and interest in the properties described below:
1. For each of the following counties or other local jurisdictions, either the rights,
title and interest prior to the Acquisition of LTC or the rights, title and interest prior
to the Acquisition of Reliance Group in all title plants serving such county or local
jurisdiction:
Washington, District of Columbia
Brevard County, Florida
Broward County, Florida
Clay County, Florida
Indian River County, Florida
Pasco County, Florida
St. Johns County, Florida
St. Lucie County, Florida
Ingham County, Michigan
Oakland County, Michigan
Wayne County, Michigan
St. Louis City & County, Missouri
2. Respondent shall also divest all user or access agreements pertaining to each
divested title plant. At the acquirer’s option at the time of purchase, and at a
commercially reasonable price, LTC shall continue to provide computer and other services
previously provided for each divested title plant by LTC or Reliance Group, for a period
up to three years from the date such title plant is divested, and shall assist the buyer
in transferring the computer and other services to any other provider of such services.
B. Respondent shall divest the properties specified in Paragraph II. A. only to an
acquirer or acquirers that receive the prior approval of the Commission and only in a
manner that receives the prior approval of the Commission. The purpose of the divestiture
is to ensure the continued use of the divested title plants as ongoing, viable title
plants used in the production and/or sale of title information, and to remedy the
lessening of competition resulting from the Acquisition as alleged in the Commission's
complaint.
C. Pending divestiture of the properties as specified in Paragraph II. A., respondent
shall take such actions as are necessary to maintain the viability and marketability of
such properties and to prevent the destruction, removal, wasting, deterioration, or
impairment of any of the properties. LTC shall comply with the following requirements with
respect to all title plants serving the counties or other local jurisdictions listed in
Paragraph II. A. in which either LTC or Reliance Group has any rights, title or interest,
during the period prior to the completion of the required divestiture for each such county
or other local jurisdiction:
- LTC shall cause the title plants to be maintained, including but not limited to updating
the records and/or indices contained in the title plants, to the extent and in the manner
maintained prior to the Acquisition.
- LTC shall cause to be maintained in good faith all contracts or agreements for access to
the title plants subject to the terms, conditions and stipulations of those contracts, and
will refrain from taking any action toward terminating those contracts other than that
which would be commercially reasonable under the terms of such contracts or agreements.
- LTC shall cause access to the title plants to continue to be provided to accessors whose
contracts or agreements for access to the title plants expire by their terms prior to the
completion of the required divestiture, in good faith on terms, conditions and
stipulations identical to those set forth in such contracts or agreements.
III.
IT IS FURTHER ORDERED that:
A. If LTC has not divested, absolutely and in good faith and with the Commission's
prior approval, all of the properties specified in Paragraph II. A. within six months from
the date the agreement containing consent order is signed by respondent, the Commission
may appoint a trustee to accomplish the required divestitures. In the event that the
Commission or the Attorney General brings an action pursuant to § 5(l) of the
Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other statute enforced by
the Commission, LTC shall consent to the appointment of a trustee in such action. Neither
the appointment of a trustee nor a decision not to appoint a trustee under this Paragraph
shall preclude the Commission or the Attorney General from seeking civil penalties or any
other relief available to it, including a court-appointed trustee, pursuant to § 5(l)
of the Federal Trade Commission Act, or any other statute enforced by the Commission, for
any failure by the respondent to comply with this order.
B. If a trustee is appointed by the Commission or a court pursuant to Paragraph III. A.
of this order, respondent shall consent to the following terms and conditions regarding
the trustee's powers, duties, authority, and responsibilities:
- The Commission shall select the trustee, subject to the consent of respondent, which
consent shall not be unreasonably withheld. The trustee shall be a person with experience
and expertise in acquisitions and divestitures. If respondent has not opposed, in writing,
including the reasons for opposing, the selection of any proposed trustee within ten (10)
days after notice by the staff of the Commission to respondent of the identity of any
proposed trustee, respondent shall be deemed to have consented to the selection of the
proposed trustee.
- Subject to the prior approval of the Commission, the trustee shall have the exclusive
power and authority to accomplish the divestiture of the properties specified in Paragraph
II. A. that have not been divested by LTC, including the authority, subject to the
approval of the Commission, with respect to any of the listed counties or local
jurisdictions as to which divestiture has not been completed by LTC, to determine whether
to divest the rights, title and interest prior to the Acquisition of LTC or the rights,
title and interest prior to the Acquisition of Reliance Group in title plants serving such
county or local jurisdiction.
- Within ten (10) days after appointment of the trustee, respondent shall execute a trust
agreement that, subject to the prior approval of the Commission and, in the case of a
court-appointed trustee, of the court, transfers to the trustee all rights and powers
necessary to permit the trustee to accomplish the divestitures required by this order.
- The trustee shall have twelve (12) months from the date the Commission approves the
trust agreement described in Paragraph III. B. 3. to accomplish the divestitures, which
shall be subject to the prior approval of the Commission. If, however, at the end of the
twelve-month period, the trustee has submitted a plan of divestiture or believes that
divestiture can be accomplished within a reasonable time, the divestiture period may be
extended by the Commission, or, in the case of a court-appointed trustee, by the court;
provided, however, the Commission may extend this period only two (2) times.
- The trustee shall have full and complete access to the personnel, books, records and
facilities related to the properties specified in Paragraph II. A. that have not been
divested by LTC, and to any other relevant information as the trustee may request.
Respondent shall develop such financial or other information as such trustee may request
and shall cooperate with the trustee. Respondent shall take no action to interfere with or
impede the trustee's accomplishment of the divestiture. Any delays in divestiture caused
by respondent shall extend the trustee’s period for divestiture under this Paragraph
in an amount equal to the delay, as determined by the Commission or, for a court-appointed
trustee, by the court.
- The trustee shall use his or her best efforts to negotiate expeditiously the most
favorable price and terms available in each contract that is submitted to the Commission,
subject to respondent's absolute and unconditional obligation to divest at no minimum
price. The divestiture shall be made in the manner and to the acquirer or acquirers as set
out in Paragraph II. of this order; provided, however, if the trustee receives bona fide
offers from more than one acquiring entity, and if the Commission determines to approve
more than one such acquiring entity, the trustee shall divest to the acquiring entity or
entities selected by respondent from among those approved by the Commission.
- The trustee shall serve, without bond or other security, at the cost and expense of
respondent, on such reasonable and customary terms and conditions as the Commission or a
court may set. The trustee shall have the authority to employ, at the cost and expense of
respondent, such consultants, accountants, attorneys, investment bankers, business
brokers, appraisers, and other representatives and assistants as are necessary to carry
out the trustee's duties and responsibilities. The trustee shall account for all monies
derived from the divestiture and all expenses incurred. After approval by the Commission
and, in the case of a court-appointed trustee, by the court, of the account of the
trustee, including fees for his or her services, all remaining monies shall be paid at the
direction of the respondent, and the trustee's power shall be terminated. The trustee's
compensation shall be based at least in significant part on a commission arrangement
contingent on the trustee's completing divestiture of the properties specified in
Paragraph II. A. that have not been divested by LTC.
- Respondent shall indemnify the trustee and hold the trustee harmless against any losses,
claims, damages, liabilities, or expenses arising out of, or in connection with, the
performance of the trustee's duties, including all reasonable fees of counsel and other
expenses incurred in connection with the preparation for, or defense of any claim, whether
or not resulting in any liability, except to the extent that such liabilities, losses,
damages, claims, or expenses result from misfeasance, gross negligence, willful or wanton
acts, or bad faith by the trustee.
- If the trustee ceases to act or fails to act diligently, a substitute trustee shall be
appointed in the same manner as provided in Paragraph III. A. of this order.
- The Commission or, in the case of a court-appointed trustee, the court, may on its own
initiative or at the request of the trustee issue such additional orders or directions as
may be necessary or appropriate to accomplish the divestiture required by this order.
- The trustee shall have no obligation or authority to operate or maintain the properties
specified in Paragraph II. A. that have not been divested by LTC.
- The trustee shall report in writing to respondent and the Commission every sixty (60)
days concerning the trustee's efforts to accomplish divestiture.
IV.
IT IS FURTHER ORDERED that:
A. For a period of ten (10) years from the date this order becomes final, respondent
shall not, without providing advance written notification to the Commission, directly or
indirectly, through subsidiaries, partnerships, or otherwise:
- Acquire any stock, share capital, equity or other interest in any concern, corporate or
non-corporate, that has any direct or indirect ownership interest in a title plant serving
any county or other local jurisdiction specified in Paragraph II. A., where at the time of
the acquisition the respondent has a direct or indirect ownership interest in any title
plant serving the same county or local jurisdiction; or
- Acquire any assets (other than in the ordinary course of business) or ownership interest
in a title plant serving any county or other local jurisdiction specified in Paragraph II.
A., where at the time of the acquisition the respondent has a direct or indirect ownership
interest in any title plant serving the same county or local jurisdiction.
Notification is not required to be made pursuant to this Paragraph IV. with respect to
any acquisition by respondent of a copy of title records or other information from a
person or entity which thereafter retains the original information in its ownership and
control, and where competition in the ordinary course between the parties is not otherwise
restrained.
B. Notification pursuant to this Paragraph shall be given on the Notification and
Report Form set forth in the Appendix to Part 803 of Title 16 of the Code of Federal
Regulations as amended (hereinafter referred to as "the Notification"), and
shall be prepared and transmitted in accordance with the requirements of that part, except
that no filing fee will be required for any such notification, notification shall be filed
with the Secretary of the Commission, notification need not be made to the United States
Department of Justice, and notification is required only of respondent and not of any
other party to the transaction. In addition to the information required to be supplied on
such Notification and Report Form pursuant to the above-referenced regulation, the
respondent shall submit the following supplemental information in respondent’s
possession or reasonably available to respondent:
- The name of each county or local jurisdiction to which the terms of Paragraph IV. A. 1.
or 2. are applicable;
- A description of the title plant assets or interests that are being acquired; and
- With respect to each title plant serving each county or local jurisdiction to which the
terms of Paragraph IV. A. 1. or 2. are applicable (including title plants in which the
respondent has a direct or indirect ownership interest as well as other title plants known
to the respondent) the names of all persons or entities who hold any direct or indirect
ownership interest in the title plant and the percentage interest held by each; the time
period covered by each category of title records contained in the title plant; whether the
respective categories of title records are regularly being updated; the indexing system or
systems used with respect to each category of title records; and the names of all persons,
including but not limited to title insurers or agents, who have access to the title plant.
C. Respondent shall provide the Notification to the Commission at least thirty days
prior to consummating the transaction (hereinafter referred to as the "first waiting
period"). If, within the first waiting period, representatives of the Commission make
a written request for additional information or documentary material (within the meaning
of 16 C.F.R. § 803.20), respondent shall not consummate the transaction until twenty days
after submitting such additional information or documentary material. Early termination of
the waiting periods in this paragraph may be requested and, where appropriate, granted by
letter from the Bureau of Competition. Provided, however, that prior notification shall
not be required by this paragraph for a transaction for which notification is required to
be made, and has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. § 18a.
V.
IT IS FURTHER ORDERED that:
A. Within thirty (30) days after the date this order becomes final and every thirty
(30) days thereafter until respondent has fully complied with the provisions of Paragraphs
II. and III. of this order, respondent shall submit to the Commission a verified written
report setting forth in detail the manner and form in which it intends to comply, is
complying, and has complied with Paragraphs II. and III. of this order. Respondent shall
include in its compliance reports, among other things that are required from time to time,
a full description of the efforts being made to comply with Paragraphs II. and III. of the
order, including a description of all substantive contacts or negotiations for the
divestiture and the identity of all parties contacted. Respondent shall include in its
compliance reports copies of all written communications to and from such parties, all
internal memoranda, and all reports and recommendations concerning divestiture.
B. One year (1) from the date this order becomes final, annually for the next nine (9)
years on the anniversary of the date this order becomes final, and at other times as the
Commission may require, respondent shall file a verified written report with the
Commission setting forth in detail the manner and form in which it has complied and is
complying with Paragraph IV. of this order.
VI.
IT IS FURTHER ORDERED that respondent shall notify the Commission at least
thirty (30) days prior to any proposed change in the corporate respondent such as
dissolution, assignment, sale resulting in the emergence of a successor corporation, or
the creation or dissolution of subsidiaries or any other change in the corporation that
may affect compliance obligations arising out of the order.
VII.
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this order, upon written request, respondent shall permit any duly
authorized representative of the Commission:
A. Access, during office hours and in the presence of counsel, to inspect and copy all
books, ledgers, accounts, correspondence, memoranda and other records and documents in the
possession or under the control of respondent relating to any matters contained in this
order; and
B. Upon five days' notice to respondent and without restraint or interference from it,
to interview officers, directors, or employees of respondent.
By the Commission.
Donald S. Clark
Secretary
SEAL
ISSUED: May 20, 1998 |