Industry News

First American gambled, lost on Mercury expansion

Dispute over Colorado subsidiaries lands in court

First American Corp. could wind up with little to show for bankrolling the growth of the title and escrow subsidiaries of Mercury Companies Inc. to the tune of nearly $100 million during the housing boom. First American is writing off its investment in Mercury, which it had last valued at $37.3 million, after a judge declined to block the sale of Mercury's Colorado title operations to rival Fidelity National Financial Inc. First American's write-down dented the company's second-quarter earnings, which the company had originally estimated at $42 million in a preliminary earnings report (see story). In a regulatory filing, First American said its investment in Mercury is "permanently impaired," contributing to a reduction in net income for the quarter, to $19.6 million. First American remains embroiled in a legal dispute with Mercury over nearly $100 million in financing it provided to the Colorado-based company in the last eight years. In recent months Mercury ...