Chicago Title & Trust to Acquire Floundering Ticor

Chicago Title & Trust has agreed to buy troubled Ticor Title Insurance, the nation’s oldest title insurance firm, for an undisclosed amount, the two firms announced Monday.

The announcement marked the second time in 11 weeks that Los Angeles-based Ticor has had a buyer for its operations, which have been hurt in recent years by fraud, property foreclosures and downturns in the nation’s real estate markets.

Ticor has floundered since a 1984 management-led leveraged buyout in which the firm was acquired from Southern Pacific for $271 million. A company spokeswoman confirmed that Ticor has defaulted on the loans used to finance the purchase.

Ticor Title has 5,400 employees and more than 300 offices nationwide, but it has been shrinking in recent years and has laid off about 1,000 workers, the company spokeswoman said. Title insurance firms guard against document forgeries and guarantee that a property does not have conflicting ownership claims.

A deal in early September to sell Ticor Title to a partnership of Chicago’s billionaire Pritzker family and Electronic Data Systems fell apart in October. EDS, founded by Texan H. Ross Perot, is now owned by General Motors.

EDS and the Pritzkers were willing to pay as much as $125 million for Ticor Title and its parent firm, Westwood Equities, but reportedly backed out after they discovered that Ticor’s financial condition was worse than believed.

Chicago Title says it is the nation’s largest title insurance firm. It is a subsidiary of Alleghany Corp., a $1-billion financial services firm based in New York. The sale is still subject to regulatory approvals, though it is expected to close by the end of March.

“If this deal is concluded, it will help stabilize the industry and put to rest all the rumor and speculation about what will become of Ticor,” said Collyer Church, executive vice president of Pacific Title Guaranty in Los Angeles. “And there has been a lot of that in recent years.”

The principal shareholders of Westwood Equities, the parent firm, are its chief executive, Winston V. Morrow, and Harold Geneen, former chief executive of ITT Corp. Westwood Equities’ mortgage-insurance and data-service businesses are not affected by the sale.

The mortgage-insurance operations sustained huge losses after an East Coast syndication firm known as EPIC failed in 1985, sparking massive foreclosures. Those operations are now being liquidated under the supervision of the California insurance commissioner.