Eleventh Circuit upholds Old Republic's $47.5 million acquisition as fair value deal

David Williams ; 2025-11-24 06:59:34

A struggling title insurer's desperate move to avoid regulatory receivership just got a major legal win – and it could reshape how distressed carriers handle survival strategies

Legal Insights

By Matthew Sellers

Nov 26, 2025Share

Eleventh Circuit has ruled a title insurer's $47.5 million asset sale to avoid receivership constitutes fair value – validating a survival strategy for distressed carriers.

ATIF, a Florida-based title insurer, faced a perfect storm in 2008. Attorney-agents absconded with funds, investments tanked, and premium income collapsed. By 2015, regulators demanded action or threatened receivership. When Old Republic Title offered to assume ATIF's policy liabilities in exchange for the company's assets, ATIF's board saw a lifeline. The alternative was a one-dollar buyout from an unaffiliated company.

The Florida Office of Insurance Regulation initially rejected the proposal, but after Old Republic agreed to assume more liabilities, regulators approved the Master Agreement executed in December 2015. ATIF transferred 47.5 million dollars in tangible assets while Old Republic assumed between 45 million and 57.2 million dollars in policy liabilities.

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When ATIF filed for bankruptcy in 2017, creditor trustee Daniel Stermer challenged the deal. He hired expert witness Allen Pfeiffer, who valued ATIF's intangible assets at approximately 80 million dollars, separately valuing the title plant at approximately 30 million dollars. Stermer argued the company had surrendered far more value than it received.

The bankruptcy court rejected Pfeiffer's analysis. The expert had estimated ATIF's revenue as if it still issued new title policies, which the joint venture agreement had eliminated years earlier. Pfeiffer also bundled all intangible assets into one valuation rather than analyzing them separately. Old Republic's rebuttal expert, Steven Hazel, highlighted that Pfeiffer's methodology lacked support from standard valuation practices. The judge found Pfeiffer had no formal credentials in valuation and had never separately valued a title plant. His opinion was too speculative to carry weight.

With intangible assets discounted, the court focused on the agreed-upon tangible figures. The roughly equivalent exchange – 47.5 million in assets for 45 to 57.2 million in assumed liabilities – constituted reasonably equivalent value. Without credible evidence about intangible asset values, Stermer's case collapsed.

When the Eleventh Circuit reviewed the case on November 24, it deferred to the bankruptcy judge's decision to exclude Pfeiffer's testimony. Appellate courts give trial judges considerable latitude in determining expert reliability.

Stermer also claimed fraud through concealment. The court disagreed. The Master Agreement had been filed with the Florida Office of Insurance Regulation, carefully reviewed, and modified based on regulatory feedback. Property deeds were publicly recorded. There was no hidden scheme.

Stermer's successor liability and alter ego arguments also failed. ATIF and Old Republic's joint venture ATFS had not truly merged. ATIF retained 240 million dollars in assets and continued operating separately. While ATFS and Old Republic eventually shared a bank account, the court found no evidence of fraud or creditor harm.

For title insurance professionals, the ruling offers three critical lessons. First, transparent regulatory engagement matters profoundly in court. When regulators actively review and approve distressed transactions, judges take notice. Second, expert witnesses in valuation disputes face rigorous scrutiny. Methodology and industry support trump conclusions. Third, strategic asset sales survive legal challenges when companies receive reasonable value, regardless of insolvency timing.

The November 24 decision reassures struggling insurers that well-documented, regulatory-approved asset transfers will receive judicial respect. The case demonstrates that keeping regulators informed and involved in distressed transactions can validate survival strategies that might otherwise face creditor challenges.