Title insurer LandAmerica Financial Group Inc. filed for Chapter 11 bankruptcy protection on Wednesday. The company also said that it has agreed to sell three of its underwriting subsidiaries to competitor Fidelity National Financial Inc.

LandAmerica, the nation’s third largest title insurer, said it decided to file for bankruptcy after Fidelity pulled out of a $128 million takeover deal late last Friday. The company also cited the shutdown of its 1031 Exchange Services Inc. subsidiary, which has also filed for bankruptcy, according to a %{=FONT-STYLE: italic}
Reuters% report.
LandAmerica said in a press statement released Wednesday, that a Fidelity subsidiary, Chicago Title Insurance Co., will acquire LandAmerica’s Commonwealth Land Title Insurance Co. in an all-stock transaction, for $158.6 million. Fidelity National Title Insurance Co. will acquire two LandAmerica units – Lawyers Title Insurance Corp. and United Capital Title Insurance Co. – for $139.4 million in stock. The acquisitions are expected to close by late December 2008.
“I am deeply disappointed over the need to file for bankruptcy protection for the LandAmerica holding company and the 1031 company,” said Theodore Chandler, LandAmerica CEO. “However, this sale of our principal domestic title operations to Fidelity National … offers our stakeholders the best result available in this brutal real estate, credit, and capital market environment.”