Industry News

First American gambled, lost on Mercury expansion

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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 ...