Title company offices foreclosed on, furniture auctioned

Investigation into underfunded escrow accounts progresses, may take another three months

Email | Print By Glenna DeRoy

Office furniture and supplies recovered from the six Forsythe Title & Escrow Services locations hit the auction block last weekend.

But the Saturday auction, run by Hendersonville Auction & Realty, had nothing to do with the almost two-month-old investigation into the Hendersonville-based company and its "significantly underfunded" escrow accounts, said Nashville attorney John McLemore, the court-appointed receiver.

Forsythe Title was placed in receivership in early February after it could not pay the between $1.6 million and $2.4 million it owes to Lawyers Title Insurance Corp. from escrow accounts that contained just $1,451 on Jan. 11.

McLemore said he now knows who was responsible for the accounts' shortcomings but said he would not release that information yet. The investigation has not concluded, he said, and First Tennessee Bank, which has a lien on everything the company owns, initiated the auction.

The company's main office on Shivel Drive in Hendersonville has been foreclosed on and will be sold March 20.

"There are six or seven different locations that were leased, and the landlords wanted the property," McLemore said. "We didn't need the desks and chairs to do our work."

McLemore said he has made "significant progress" on the investigation, which should take another few months, despite one auction-related setback.

"Not only did the furniture get repossessed, but the building we were operating in and doing the audit in got foreclosed on," he said. "We are now in the process of picking up and moving all the files and some furniture to a new location so we can continue working."

David Anthony, a Bone McAllester Norton lawyer representing First Tennessee, said the bank has sued company owner Chris Forsythe for "unpaid debt." Anthony said he could not comment further on the litigation, which is pending in Sumner County court.

Steve Lefkovitz, Forsythe's attorney, did not return a call for comment Thursday morning.