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    Post: Another 1031 Exchange Company Bites the Dust

    Posted by Peter Wunsch on 11/25/08

    News reached me today from a friend at a major national
    commercial real estate brokerage that LandAmerica 1031
    Exchange, a substantial firm in the 1031 business, is
    “terminating operations” immediately. They have frozen
    customer accounts and are unable to meet customer
    withdrawal demands. Seems LandAmerica invested its
    customers’ dollars in illiquid auction rate securities. So
    now all LandAmerica customers who have their hard-earned
    capital gains and principal with LandAmerica can’t access
    their funds and stand a good chance of losing some or all
    of it.

    As those of you who have read my blog
    ( or visited our website
    ( know, we have been predicting
    trouble for 1031 companies that have other businesses, such
    as selling/packaging tenant-in-common deals or other
    brokerage activities. In fact, we’ve been so adamant in our
    warnings that we’ve received hate e-mail from other 1031
    companies. This news should silence our critics.

    Consider this information which I copied directly from the
    LandAmerica 1031 website just five minutes ago:

    “As a wholly owned subsidiary of the publicly traded
    LandAmerica Financial Group, Inc. (NYSE:LFG), which also
    owns an FDIC insured bank, LandAmerica 1031 Exchange
    Services, Inc. (LES) is uniquely positioned to provide the
    security and liquidity that taxpayers and their advisors
    should be demanding from a qualified intermediary. To learn
    more about the strength of LES and why it is the
    appropriate QI to choose to facilitate your exchanges…”

    “Recent events have caused many advisors to recognize the
    need to better assess the solvency and fidelity of the
    Qualified Intermediaries (QI) used to structure “safe-
    harbor” IRC § 1031 deferred exchanges, commonly referred to
    as 1031 exchanges. Advisors, including attorneys,
    accountants and real estate professionals, are examining
    anew the importance of recommending a QI that is a reliable
    financial resource for their clients. In an industry that
    includes a vast number of privately held, unregulated
    providers, LandAmerica 1031 Exchange Services stands out
    for its transparency and reliability. As a wholly-owned
    subsidiary of LandAmerica Financial Group, Inc., a publicly
    traded company, and operating in a highly-regulated
    industry, we are held to strict legal standards concerning
    reserves and transparency in our finances and processes.
    LandAmerica Financial Group, Inc. holds its own bank, and
    has affiliates licensed to issue title insurance

    As real estate investors with more than 40 years
    experience, we started RockSolid 1031 because we were
    almost burned to the tune of $6 million by an unscrupulous
    1031 Exchange Accommodator. We created RockSolid for
    serious investors and all it does is exchanges: there are
    no other product areas or affiliated companies that can
    draw cash from it. RockSolid simply deposits the exchange
    money in highly liquid money market accounts that only
    invest in US treasuries, and then returns it on the date
    the investor specifies, all for a low fee. It’s that
    simple, and that safe.

    RockSolid 1031

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  • Another 1031 Exchange Company Bites the Dust, 11/25/08, by Peter Wunsch.

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