A Philadelphia bank announced yesterday it has bought back a District-based real estate title insurance company that it sold less than two years ago to EPIC Holdings Ltd. of Falls Church, parent of the troubled Equity Programs Investment Corp.
The sale brings full circle a complex chain of events in which District Realty Title Insurance Co. was sold into the EPIC family in 1984, spun off last year along with a number of other companies to EPIC founder Tom J. Billman, and now sold back to its original owner, the Industrial Valley Bank and Trust Co.
Industrial Valley Bank said that sold District Realty Title for $11 million and bought it back for $5 million.
The most recent sale also included an agreement on the handling of claims filed against the 95-year-old insurer as a result of the collapse two years ago of Battlefield Builders, a large Northern Virginia residential development company for which District Realty Title had written coverage, according to Kathleen S. Allison, a spokeswoman for Industrial Valley Bank and Trust Co.
Title Insurance Acquisition Inc., the EPIC-related company that bought District Realty Title in April 1984, sued the Philadelphia bank and its subsidiary a year later alleging that the bank "misrepresented" facts by not disclosing the kind of coverage provided for Battlefield projects, exposing the title firm to millions of dollars in claims and damage to its reputation.
The lawsuit was dismissed last summer and District Realty Title subsequently paid out $3 million in claims and legal fees to Battlefield creditors, according to Samuel R. Gillman, who has been president of the company during its changes in ownership in the last two years and will stay on the job. Only three Battlefield-related claims remain unsettled, and have become the responsibility of the new owner, Industrial Valley Title Insurance Co., the Philadelphia bank's subsidiary, he said.
EPIC's lawsuit, filed in U.S. District Court in Alexandria, said suppliers and subcontractors had filed about $5.5 million in liens against Battlefield's residential construction projects, an amount close to the company's net worth of $7 million in 1984. It asked that $30 million in damages.
An audit of District Realty's books is still in progress, but the company's net worth is still estimated at about $7 million, said Industrial Valley Title chief financial officer Anthony J. Petronio.
Industrial Valley Title is a $33 million firm with offices in 19 states, according to a company announcement. The firm recently opened a Montgomery County office.