First Title Insurance (First Title), a subsidiary of First Title plc and the largest provider of title insurance in the United Kingdom and Europe, is pleased to announce that it provided a tailored title insurance policy to facilitate the high-profile purchase of Dawnay Day's UK portfolio of 221 commercial assets.
First Title Insurance, appointed by BDO Stoy Hayward LLP the Receivers of the Dawnay Day companies was employed to help BDO to overcome the challenges associated with the sale of such a significant portfolio, namely the costly and lengthy due diligence process. By offering First Title's policy as part of the overall proposition, the Receivers made the sale of the property portfolio more attractive to potential purchasers.
By providing comprehensive title insurance through the creation of a bespoke policy, First Title Insurance enabled the legal due diligence element of the complex transaction to take place more quickly and efficiently. The policy overcame the lack of vendor's title warranties in a typical sale by an administrator or receiver by guaranteeing title for the purchaser, F&C REIT Asset Management and its shareholders.
By employing a sampling approach, First Title Insurance enabled the deal's lawyers to avoid the time-consuming process of trawling through every title document. This lengthy process was completed in a matter of days, subsequently guaranteeing the purchaser ownership, as well as ensuring that F&C REIT Asset Management avoided having to take a view of any known or unknown title issues. As a rule, speed, during this type of transaction, means that assets are less likely to decrease in value during the time it takes to complete the due diligence process.
Phillip Oldcorn, chief executive officer of First Title Insurance, says: "First Title's facilitation of the Dawnay Day property deal demonstrates a new and successful way of handling such complex transactions with major benefits for all parties. BDO Stoy Hayward particularly benefited from the bespoke proposition, which enabled it to overcome the issues surrounding a lack of title warranties. The process also helped to make the assets more saleable and attractive for a purchaser and significantly increased the speed of the legal elements of the transaction. BDO Stoy Hayward had the added benefit of being able to include the cost of First Title's policy in its recovery costs. Not only is this the first time that such a policy has been used as an allowable expense, but it is also the first time that an insurance policy had been used in this manner in an insolvency.
"First Title's tailored approach has provided a blueprint for the future of single and multi-asset sales in recovery situations. During the current climate, risk management has never been more integral to such deals, and guaranteeing that the purchaser has good title goes a long way towards ensuring this."
Shay Bannon, business restructuring partner at BDO Stoy Hayward, said: "Working in a professional and commercial partnership with First Title Insurance plc added a new dimension to this transaction. Using insurance enabled us to present these assets to prospective purchasers with the benefit of certain title, which would otherwise have been unavailable. We will definitely consider title insurance in all future sales of distressed assets, and would recommend First Title as our insurer of choice. Their speed of response and the flexibility of its products were first class."
Source: First Title