Jackson Jambalaya

Collection of all posts on the Evans case.

A federal court sentenced the Evans brothers to jail yesterday in the largest mortgage cause ever in Mississippi. U.S. District Judge Dan Jordan, III sentenced Chris Evans to 168 months and Charles Evans, Jr. to 240 months in prison for bank fraud and money laundering. The two brothers created over thirty companies to defraud over fifty banks to obtain approximately $80 million in mortgage loans. Assistant U.S. Attorney Mike Hurst said "It was a fair sentence for the Bernie Madoffs". Judge Jordan also imposed a three-year term of supervised release after imprisonment and forbade either man from obtaining a line of credit without approval.

The two brothers sat passively through the hearing- sullen and resigned to their fates. Chris Evans looked older, more gaunt, than he did when first seen a year ago. He had been free on bond. Charles Evans looked the same as he did then- shackled in orange, looking ahead into space while the proceedings whirled around him.

Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. Chris used over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract did not exist as the larger tract was never subdivided. Charles provided a title certificate however showing the borrowing company owned the land even though it didn't. The brothers used other LLC's to borrow $27 million from Texas banks to purchase properties in the Dallas area. Note to Clarion-Ledger: Mr. Evans did not work for Mississippi Valley Title (I imagine Scott had a conniption when he saw that one. ;-) ).

Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. Both Charles and Chris Evans filed Chapter 7 bankruptcy petitions. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.


The court said the amount stolen was $27 million. This amount is not the same as the amount obtained through fraud by the Evans brothers. The Fifth Circuit ruled in U.S. v. Goss the damages for mortgage fraud cases had to be calculated after the property was returned to the lender and the value of the property was deducted from the amount gained through fraud (Example: Banks loans $100,000 to purchase a property. Borrower uses fraud to get loan. Bank gets land back but it is worth $80,000. Banks loss is only $20,000). The Evans brothers obtained $27 million in loans from Texas banks for properties in Texas. However, the Texas banks were able to foreclose on their collateral, thus mitigating the losses in Texas. Jackson Jambalaya reviewed the loans in an earlier post and exposed the fact the brothers had obtained over $80 million in mortgages.

Evans attorney John Collette made several objections to the loss amount, enhancement for using sophisticated means to commit fraud, and enhanced penalties for fraud. Judge Jordan overruled the objections as he said the brothers used over 30 companies to hide assets and agreed with the prosecution the fraud was a Ponzi scheme using banks and as an investment fraud it qualified for enhanced penalties.

An emotional Chris Evans told the court:

"When I first stepped across the line, I had good intentions. I never intended to hurt anyone, I got deeper and deeper. I was wrong, there is no excuse for it. I've disappointed society, my family and friends. What I did was wrong. Whatever is left of my life, if I can do anything constructive I will."

Charles Evans was more sullen and tight-lipped as he said "I accept full responsibility for what I have done. I was wrong."

That was his whole statement. No victims spoke but in a move that surprised everyone in the courtroom, bankruptcy trustee Derek Henderson addressed the court before sentencing. Mr. Henderson very forcefully told the court

"What offends me is these two are attorneys. They used their licenses as a member of the bar to do what they did. They want you to believe they did not line their pockets (Collette's argument)." Mr. Henderson said they abused the escrow account and lived off of it. He said although Chris Evans was compliant "they knew what they were doing, they were members of the bar, and that should offend this court" (Made me wish the bar would replace Kilgore and Waddell with this guy.).

Chris Evans will report to prison on February 21, 2012 at 12:00 PM. Charles Evans will remain in custody. Mr. Evans was arrested Memorial Day weekend in 2010 after he tried to reach for a gun in a gun bag when two marshals tried to apprehend him for for a bench warrant issued by the bankruptcy Court. Mr. Collette argued with a straight face if anything Mr. Evans "would have never pulled a gun on anyone" and if anything, "Mr. Evans was at risk." Several people in the audience fought to keep from laughing when hearing this statement. Judge Jordan said Mr. Evans actions during the arrest could be used to enhance the penalty. Judge Jordan also imposed an $18.5 million judgment against each brother

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From PACER:

Set/Reset Hearings as to Charles H. Evans, Jr, Jon Christopher Evans: Sentencing reset for October 5, 2011 at 9:00 AM in Courtroom 5A (Jackson) Jordan before District Judge Daniel P. Jordan III. (SP)

For a collection of all posts on Evans case, see special coverage section on right side of the page.

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For a collection of all posts on Evans case, see sidebar on right. Synopsis at bottom of post.


Mississippi Valley Title Insurance Company and its parent company, Old Republic, filed a motion to hold Charles Evans in contempt of court on April 6 in U.S. Bankruptcy Court. Judge Neal Olack had ordered Mr. Evans to submit to a Rule 2004 exam by Mississippi Valley Title before April 1. Apparently Mr. Evans' attorney even went so far as to claim he had tried to make his client appear for the exam but was unsuccessful in his efforts. The motion also accuses Mr. Evans of withholding documents and failing to provide an accounting of his lawyers trust account. Mississippi Valley Title asked the Court to issue civil and criminal sanctions against Mr. Evans. Indeed, MVT asked for "severe" sanctions. Copy of motion

Mississippi Valley Title Insurance also filed an answer in the suit filed by Westport Insurance Company, the malpractice insurance carrier for Charles Evans. Westport filed suit seeking to withdraw its coverage of Charles Evans in January. Copy of motion, Copy of answer Mississippi Valley Title opposes Westport's withdrawal from the case. MVT demanded a jury trial. The suit mentions MVT and Old Republic because they are plaintiff's in a lawsuit against Charles Evans and Bank of Forest because it is involved in litigation against Charles Evans as well.

Another development that is interesting is Mississippi Valley Title filing a claim on April 9 against Chris Evans in Bankruptcy Court. Despite representing to the Court in November that 65 claims for $41 million had been filed against the insurance company by banks victimized by the Evans brothers, Mississippi Valley Title stated its claim against the estate at $13,119,842, a difference of nearly $28 million. MVT's claims registration, November affidavit, Itemized list of loans

The proof of claim filed by Mississippi Valley Title states it has only paid four claims for $1,975,000 in the Evans case despite the fact it filed suit against the Evans brothers in September. Mississippi Valley Title paid Metropolitan Bank $500,000, Holmes County Bank $525,000, M&F Bank $450,000, and Commercial Bank & Trust $500,000. Eight months since the fraud was discovered by Mississippi Valley Title yet only four claims have been paid.

Meanwhile, Mississippi Valley Title released its 2009 annual statement and an accompanying actuarial opinion, and statement of investments. The claims reserves are approximately $34 million and relatively unchanged from the previous year.

Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't. Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.

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A Madison County Circuit Court ordered Natchez bank Britton & Koontz and Mississippi Valley Title Insurance Company to enter into mediation last Monday. B&K loaned $904,000 on property allegedly owned by Chris Evans. Charles Evans, the brother of Chris Evans, was an approved attorney for Mississippi Valley Title and issued a phony title certificate showing an LLC operated by Chris Evans owned the land in question when in fact it never held ownership in the land at issue. Thus B&K loaned money to an LLC without realizing there was no collateral.

B&K filed a claim on its title insurance policy against MVT. MVT never paid the claim. B&K sued Mississippi Valley Title. MVT tried to invoke an arbitration clause in the policy and here we are. See earlier post. JJ has also learned Mississippi Valley Title has paid some claims but as one source put it, such claims were "a drop in the bucket".

Britton & Koontz should settle for nothing less than full payment of the claim and attorney's fees. It was MVT's rogue "approved attorney" that burned the bank. It obtained a title insurance policy to protect itself against what? Defects in the title. Mississippi Valley Title is engaging in nothing more than bad-faith stalling tactics as from day one in the Evans case, it has kept information hidden, refused to disclose the extent of the fraud until forced to do so, paid few claims out of 65 it um, claimed were filed, and fought every attempt to scrutinze its dealings with Charles Evans. B&K should demand full satisfaction.

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For a collection of all posts on the Evans case, see sidebar on the right.

Natchez bank Britton & Koontz responded to Mississippi Valley's attempt to avoid honoring its title insurance policy in Madison County Circuit Court. JJ reported on January 7, 2010:

"The Evans case continues to heat up as Britton & Koontz Bank (Natchez) filed a lawsuit on December 22, 2009 against Mississippi Valley Title Insurance Company seeking to enforce a title insurance policy it purchased from Mississippi Valley Title and recover related costs. Britton & Koontz bought the policy for a loan it issued to Chris Evans. Mississippi Valley Title responded with a Motion to Compel Arbitration, citing an arbitration clause in the insurance policy. Copy of complaint

B&K granted a mortgage for $904,000 to Brashear Heath, LLC, a company owned by Chris Evans on May 2, 2008. Deed of Trust. The bank argues the policy covered fraud and that it filed the claim pursuant to the notice provisions in the policy. Apparently Brashear Heath never owned the property that was the subject of the loan even though (and this is a familiar story) Charles Evans certified Brashear Heath owned the land. The Natchez bank first filed a claim with the insurance company, sent a demand letter to Mississippi Valley Title seeking payment of its claim after the thirty day payment period passed, (Copy of letter is on page 16 of complaint.), and then filed suit in December after Mississippi Valley Title did not pay the claim.

Mississippi Valley Title answered with a Motion to Compel Arbitration on January 4, 2010. The defendant cited a clause in the thirteenth paragraph of the title insurance policy. The clause cited states: "Either the company or the insured may demand that the claim or controversy shall be submitted to arbitration..." (See page 10 of the complaint for a copy of the policy.). Motion to Compel Arbitration, Memo in support of Motion to Compel Arbitration."
Earlier post

John Corlew, attorney for B&K, filed his response on February 19. Mr. Corlew claimed the arbitration language was never approved by the bank and it is not a "valid agreement". The response states the clause can not be enforced because well, the forum cited by MVT to be used for arbitration no longer exists.

The arbitration rules cited by the policy states "disputes administered in accordance with Title Insurance Arbitration Rules are administered by the National Arbitration Forum." However, the forum is no longer accepting new disputes pursuant to a consent decree with the Attorney General of Minnesota. Legal Times reported last July in its blog:
"The National Arbitration Forum announced Sunday that it would stop doing business in consumer arbitration by the end of this week, as part of a settlement with the attorney general of Minnesota. The settlement came less than a week after the attorney general there filed suit in state court accusing the Forum of deceptive trade practices by failing to disclose its interests in debt collection while claiming to be a neutral arbiter between consumers and corporations." Article

It is a fundamental rule of contract law that ambiguities in contracts are to be construed against the draftor. Since Mississippi Valley Title is the party citing the arbitration language it drafted, one can imagine a court is not going to be too sympathetic with MVT trying to use an arbitration forum that no longer exists for their purposes. However, the judge could order the parties to select another arbitration panel to meet the purposes of the contract as well. Since the "alleged" Evans fraud was discovered last summer, Mississippi Valley Title Insurance has not paid a single claim to any of the victimized banks even though 65 claims have been filed. This case just keeps getting more interesting and interesting.


Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't. Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.

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For a collection of all posts on Evans case, see sidebar on right side of page.


Audio recording of hearing last Friday. If audio doesn't work, try this link.

A hearing was held in the Evans case last week to determine the fate of several motions, responses, and other actions filed in U.S. Bankruptcy Court. The room was awash in gray and black waves of suits as bankers and lawyers once again flooded the courtroom. The main focus of the hearing was the intent of the bankruptcy trustee to sell the properties owned by Chris Evans and divide up the proceeds among the lien-holders. Chris Evans has stated in court filings he owned properties worth approximately $82 million in Madison County MS, Desoto County MS, Collin County TX, Harrison County MS, and Denton County TX.

Derek Henderson, the bankruptcy trustee, filed a notice with the court stating his intent to sell the subject properties due to the dispute between various parties as to who had proper claim to each property. The true ownership of the property is extremely difficult to determine thanks to the actions of Chris and Charles Evans. Chris Evans operated a multitude of LLC's. Company A would buy a large tract of commercial real estate in a prime location. Company B, another Evans company, would obtain a loan from a bank a smaller portion of the tract. The bank provided the loan to Company B because Charles Evans, the brother of Chris Evans, was an "approved attorney" for Mississippi Valley Title Insurance Company and would issue a title certificate stating Company B owned the land.

The only problem with this little transaction was the title certificate was phony as Company A never actually transferred title of the property to Company B. Thus the bank lent money to a company that did possess title to the subject property. Company C would then obtain a loan on a smaller tract adjacent to Company B's tract with another phony title certificate, then Company D and the rest of the Evans-owned companies. Several smaller tracts overlapped each other or a company would get multiple loans on the same tract of land from different banks. The title descriptions for the smaller tracts were literally drawn up out of thin air with no thought given to the other tracts within the parent tract. Unfortunately for those banks, the combined loans were more than the fair market value of the subject property. Even more unfortunate was Mississippi Valley Title issued title policies to the affected banks due to the actions of their "approved attorney".

The end result was that multiple banks issued loans to Chris Evans for larger tracts of properties and no portions of those large tracts were transferred to the companies that obtained loans on the smaller tracts. Thus many banks (over 30 in Mississippi) issued loans to phony properties and are demanding the Court makes them whole. Some banks actually do have valid title but most are empty-handed having lost their money and collateral. Needless to say, they are demanding either the Evans estate in bankruptcy court or MVT repay them as over $41 million in claims have been filed against the title insurance company. It should be noted the Evans case is alleged to be the largest real estate fraud in Mississippi history.

MVT initially discovered the fraud and filed several emergency actions against the Evans brothers and their companies in Madison County Chancery Court. Judge Harvey-Goree granted their motions and set a hearing date for the Evans brothers to defend their interests. The day before a hearing was held, Chris Evans filed for Chapter 7 bankruptcy. His companies filed bankruptcy petitions at later dates. The Chancellor granted a preliminary injunction to MVT and froze the assets of Charles Evans and ordered a full accounting of his finances as well. What was key for MVT was Judge Harvey-Goree ruled "all defendants shall execute deeds and/or modification agreements, as directed by Mississippi Valley Title, to correct and/or cure title problems." Copy of preliminary injunction

This order was very important to Mississippi Valley Title as it allowed them to pick and choose winners and losers among the victims. The average loan in Mississippi was $620,000. Some were as small as $200,000, others were as large as $3 million. MVT gained from the ruling the right cure a title in favor of a preferred customer and thus give it the land as collateral and avoid paying that client its claim. Most, if not all, of the policies state coverage is based on what the land is worth, not the actual loan amount. One could easily see how MVT could hand over the Evans properties to a handful of big banks such as Regions and Bancorpsouth while eventually paying claims to the smaller banks that would still lose money if the payment was based on a property that was reduced in value.

Mississippi Valley Title discovered Judge Olack and Mr. Henderson apparently have other ideas on what should be done with the properties. Mr. Henderson acknowledged the ownership of all properties but argued that bankruptcy law allowed him to sell such properties and divide up the proceeds among the creditors at a later date if there was a bona fide dispute as to the ownership of the properties. However, Mr. Henderson admitted he needed to create "a long-range plan" and that he didn't want to "flood the market" with these properties and artificially depress the sales prices. He then stated he would be able to maximize the sales value if he could sell the smaller tracts as part of larger tracts. Judge Olack said in an earlier hearing he had used this method in similar cases and was inclined to apply it to this one as well.

Judge Olack stated there were thirty objections to the trustee's motion to sell and that they fell into five categories (25-minute mark on the audio). The Court specifically called out Mississippi Valley Title's objection to the sale. The judge said they all ignored Rule 363(f)(4) of the code that gave the trustee the power to sell the properties if in dispute without the creditors' consent and that the trustee definitely had the power to make the sale.

Judge Olack stated he only wanted to hear the objections of Mississippi Valley Title. MVT's attorney Richard Carmody argued MVT had obtained orders in the Madison County Chancery Court directing the Evans-owned company to transfer title of each property to a bank of MVT's choosing and that such orders should be respected. Upon Olack's direct question, Carmody admitted the transfers had not occurred. Olack also pointed out the order was part of a preliminary injunction, not a final court order. It should be noted the banks were not parties in the original state court action and thus lack the rights they have as creditors in bankruptcy. MVT wanted to preserve the Chancellor's order's and argued there was not a "bona fide dispute". MVT argued the banks had no rights and were not in the chain of title. The chancery court lawsuit has been removed to federal court and is the subject of another action to move into the bankruptcy court.

Judge Olack ruled all parties had until April to file answers and ninety days would be given for discovery at that time. He then set a trial date on October 25 and made it quite clear he was not going to extend any deadlines. The judge said a public auction would be "problematic." Olack directed Henderson to obtain the services of a realtor with expertise on a national scale and the trustee could generate "discreet sales" and avoid the problem of flooding the market. Judge Olack then encouraged the trustee to sell the properties as part of a larger group and that once it was "reduced to cash", they could then figure out how to divide up the proceeds among the creditors and that the goal was to "convert some dirt to dollars."

Recap: Judge wants the properties sold, he's going to have a trial in October, and threw out the window Mississippi Valley Title's serious attempt to control the case by picking the ownership of each property which would have canceled out quite a few of the pending claims against MVT.

Stay tuned.

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Bank of Forest, First State Bank, Holmes County Bank, State Bank, First Security Bank, M&F, and Omnibank served James Lee III with a notice of deposition yesterday. JJ has learned Mr. Lee was the former sales manager at Gulf States Directory. Chris and Charles Evans operated the company after inheriting it from their father upon his death. The Evans brothers operated the law practice, directory business, and the LLC's that are the subject of the Evans fraud case out of the same small office on Office Park Drive in Jackson. It will be interesting to see if Mr. Lee takes the fifth amendment during deposition or if any other party moves to stop the deposition. Copy of notice

Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't.

Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.

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For a collection of all Evans posts, please see sidebar on right side of page. Synopsis of case is at the bottom of the post.

Trustee seeks to cancel all actions in state court
Bankruptcy Trustee Derek Henderson and Mississippi Valley Title traded blows over the weekend. Mr. Henderson filed a complaint in U.S. Bankruptcy Court in the Evans case against Mississippi Valley Title and all of the banks in the Evans case. The trustee asked the court to nullify any actions taken in state courts that determined who the true lien-holders of each tract of Evans-owned property were and "liquidate" the claims of each defendant that has "asserted" a claim "relating to each tract."

There have been quite a few actions filed in the Madison and Desoto county chancery courts seeking rulings on which lenders have the first lien on each property. Most of the lawsuits filed were submitted by attorneys Gene Barry and Todd Burwell (of Robbie Bell fame) that are typically associated with Mississippi Valley Title. Over twenty actions seeking declaratory relief have been filed in Madison County alone.

Mississippi Valley Title must have met with its lawyers over the weekend because a response was filed yesterday. Copy of response MVT asked the Court to "permit" Mr. Henderson to "execute" the conveyances already ordered by state courts. Copy of Complaint

Impact of Evans case on Earnings
JJ reviewed the 2009 second quarter, 2009 third quarter, and 2008 annual statement for Mississippi Valley Title as well as the 2009 third quarter earnings statement for its parent, Old Republic. It should be remembered MVT stated in the bankruptcy court that claims of $41 million were submitted to it by policyholders in the Evans case.

The earnings statements reveal the following:
1. MVT had claims reserves of $35,380,452 as of September 30. (P.4, Known and Statutory Claims reserves were combined.) 3rd Quarter Earnings Statement
2. MVT had claims reserves of $35,657,424 at the end of 2008. Apparently Mississippi Valley Title did nothing to shore up its claims reserves in the same quarter it became aware of its potential liability due to the Evans case. 2008 annual statement, (2nd quarter was $34,314,931, 2nd Quarter Earnings Statement
3. Old Republic has over $14 billion in assets as of September 30. 3rd Quarter Earnings
Statement
4. Old Republic's Title Insurance Division reported:

• Pretax operating income of $4 million in the third quarter.
  
• a $9.7 million loss in the third quarter last year.
  
• a profit of $600,000 for the entire year
• a $27 million loss for the first three quarters of 2008.

Thus Old Republic's Title Insurance Division finally earned a profit in the third quarter after losing some money for some time. This is important as Old Republic is hemorrhaging badly in its mortgage insurance division: $160 million loss in the third quarter, $443 million loss in the first three quarters of 2009, and a loss of $415 in the first three quarters of 2008.

Old Republic reported an overall loss of $46 million for the third quarter and $116 million for the year ending September 30. That was an improvement as on September 30, 2008, Old Republic reported a loss of $431 million for the year.

If Mississippi Valley Title/Old Republic thus paid the $41 million in claims it stated in court filings were submitted by policyholders, the insurance company would probably see its entire profits for the title insurance division effectively wiped out although it would come out of the claims reserves. The question still remains: will Old Republic pay claims out of its own reserves, pay them first out of MVT's, or will it play hardball and fight every claim as it is doing with Britton & Koontz? The question thus must also be asked what the future of Mississippi Valley Title will be at Old Republic if the insurer pays $41 million in claims. One can imagine the insurer re-examining the um, nature of that relationship.

Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't.

Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.

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For a collection of all posts on Evans case, see sidebar at the right. A synopsis of the case is at the bottom of this post.

Judge Olack ordered Mississippi Valley Title Insurance Company to provide several banks with documents and information regarding claims filed by the banks in the Evans case and the "historical relationship" between Mississippi Valley Title and Charles Evans.

The Bank of Forest, Merchants & Farmers, State Bank, Bank of Yazoo, First State Bank, Cadence Bank, and Community Bank filed a motion requesting the Court grant them permission to conduct a 2004 exam of Mississippi Valley Title.

Rule 2004(a) of the U.S. Bankruptcy Code states "On motion of any party in interest, the court may order the examination of any entity." Rules of Bankruptcy. MVT is the only party besides Chris or Charles Evans that has a true idea of the amount and number of claims, the properties involved, and the extent of any fraud that took place. The banks are thus attempting to use rule 2004 to learn exactly what is in MVT's hand as it adjudicates title insurance claims filed by banks victimized by the Evans brothers.

Judge Olack hammered David Clark, counsel for MVT in his ruling. The Court said Clark was "given a deadline in which to submit an order that reflected the rulings in the Bench Opinion and that was approved as to form by all other counsel." Translation: Judge Olack told Clark to submit an order that everyone agreed on within a certain time frame. Instead, the Court stated Clark "submitted one version and a later amended version of an order on the Motion that no other counsel had approved as to the form." The Judge then pointed out the parties could not agree on an order and chastized them for doing so, calling it "unacceptable" and that "further failure to comply with this court's directives regarding submission of orders may result in the imposition of sanctions or other relief."

The Court rejected the proposed orders by both sides and decreed:
1. MVT shall produce a property description and street address for each property insured by MVT that was issued to any creditor in the bankruptcy as well as
a. A lists of all interests against the property.
b. All items and analysis regarding each claim and its validity.
c. All appraisals for each property.
d. Any existing surveys for each property.

2. "All items regarding the historical relationship" between MVT and Chris Evans and between MVT and Charles Evans.

3. "All items that support the allegations contained in the original complaint and the first amended complaint filed by MVT in the Chancery Court of Madison County."

Copy of order

One can imagine the banks will make full use of this order, especially the part about the "historical relationship" as they have repeatedly accused MVT of hiding information from them.

Update: Old Republic's 3rd Quarter Earnings Statement. 4th Quarter release scheduled for January 28, 2010.

Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't. Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.

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Chris Evans filed a schedule of his assets, liabilities, and claims in U.S. Bankruptcy Court last week. Copy of schedule. It's 76 pages long but there are many important facts in the schedule. Mr. Evans claims he owns $82,790,000 in properties and there are $60,260,266 in secured claims.

Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't. Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.

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Related post: Banks loaned nearly $40 million to Evans

Did a huge case of mortgage fraud take place in Madison County? Mississippi Valley Title and its parent company, Old Republic National Title Insurance Company, filed suit within the last several weeks in Madison County Chancery Court against Jackson attorney Charles Evans, Jr. and his brother, Jon C. Evans, alleging fraud.

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