Title insurer Riverside Abstract may be selling its assets to a New Jersey health care entrepreneur in the wake of rumors that Fannie Mae and Freddie Mac had banned business with the company.
“Regrettably, the rumor had inflicted immediate harm to Riverside’s reputation and, consequently, its business,” Riverside’s owners wrote in an email to employees. “To forge a path forward, the principles of Riverside have reached a deal with Avery Eisenreich, who tentatively agreed to purchase Riverside’s assets.”
Riverside said its employees would remain in the same roles at the new company.
Talk of a potential pause in business at Riverside and at another large title insurer, Madison Title Agency, grew from a confidential email from a Troutman Pepper lawyer to clients that was leaked.
Riverside’s owners said the rumor was false and that the company can serve as the title and escrow agency in any transaction.
Troutman Pepper issued a statement saying the email contained “inaccurate statements” that were not endorsed or approved by the firm.
“Troutman Pepper apologizes for any confusion or distress that such email may have caused to Madison Title, Riverside, or the other title company mentioned in the emails,” the firm said in a statement.
Title insurers comprise a multi-billion-dollar-a-year industry, but have long been an opaque corner in commercial real estate. The business is designed to protect buyers from acquiring property that does not actually belong to the seller.
Madison and Riverside ranked fifth and 10th, respectively, on The Real Deal’s 2018 list of New York’s largest title insurance companies with $2.3 billion in transaction volume.
Both companies were mentioned in a Department of Justice investigation into real estate investor Boruch Drillman.
The Department of Justice alleges Drillman engaged in a multi-year scheme to obtain over $165 million in loans to fraudulently acquire multifamily and commercial properties. Drillman pleaded guilty to one count of conspiracy to commit wire fraud. Neither Madison nor Riverside were named as defendants.
Eisenreich is the founder of New Jersey-based Alaris Health, which runs health care facilities in the state. News of the possible sale was first reported by Hiten Samtani and then by Lakewood News Network.
Riverside and Eisenreich did not respond to requests for comment.
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