Large Florida title company in receivership
A 32-year-old title company that once boasted seven offices and 85 employees in Palm Beach County, Fla., is in receivership, its founder’s whereabouts unknown, with an underwriter saying $2.5 million in escrow funds are missing.
By the time Flagler Title founder Roger Gamblin and his wife, Peggy, disappeared May 29, the company had already closed all but three offices and reduced its workforce to 33 employees, a longtime employee told the Palm Beach Post. Less than $80,000 remains in Flagler Title’s escrow accounts, plus $2,000 held by another company run by Gamblin, Interstate Title Services. On June 16, Circuit Judge Tom Barkdull granted a request by three title insurance underwriters to place the company in receivership. Court-appointed receiver Larry Saichek told the Post he’s received 60 claims for missing escrow money. Saichek will determine whether Flagler Title will file for bankruptcy protection.
According to the company’s Web site, Flagler Title was founded in 1976, and was "the leading title company" in the Palm Beach County area. The Post said 350 Florida title agencies have shut down since January.
Consumer sentiment lowest since 1980
The Reuters/University of Michigan Surveys of Consumers show consumer confidence hitting a 28-year low in June, falling to 56.4 from 59.8 last month, Reuters reports. The index, which dates back to 1952, was last lower in May 1980, when it registered 51.7. Rising prices of gasoline and food, coupled with falling home prices and job losses, were factors in weakening consumer confidence, the report said. The survey showed consumers’ five-year outlook for inflation remaining steady at 3.4 percent, the highest in 13 years. One-year inflation expectations fell to 5.1 percent, down a tenth of a percent. The index of consumer expectations fell from 51.1 in May to 49.2 in June, and the index of current personal finances fell from 80 in May to 69 in June, the lowest reading on record.
N.Y. appraisal probe spawns First American shareholder suits
Three law firms have filed lawsuits seeking class-action status to represent shareholders of First American Corp., claiming the company overstated profits and revenue from subsidiary eAppraiseIT LLC. The lawsuits are based on allegations made last year by New York Attorney General Andrew Cuomo, who charged eAppraiseIT with engaging in an illegal scheme with Washington Mutual Inc. to inflate appraisals. Washington Mutual was not named in Cuomo’s suit, and both companies deny wrongdoing (see story).
One of the three civil suits filed this week on behalf of investors alleges that First American overstated its gross profit margins and net income from eAppraiseIT, and made false and misleading statements regarding the company’s internal controls and financial performance. That suit was filed on behalf of the Berks County Employees Retirement Fund and other "similarly situated shareholders" of First American Corp. by Wilmington, Del.-based law firm Grant & Eisenhofer. An Oklahoma City, Okla. firm, Federman & Sherwood, and Atlanta-based Holzer Holzer & Fistel have filed similar lawsuits. All three suits were filed in the U.S. District Court for the Southern District of New York.
Attorneys for First American had not filed responses to the lawsuits and the company did not immediately respond to a request for comment.
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