Asset Preservation Inc Review 2026: Stewart Filings and Safety

Who owns Asset Preservation, Inc. today

Two sources say the same thing, and one of them is not API. Stewart's 10-K for 2025, filed February 27, 2026, lists Asset Preservation, Inc. among its subsidiaries in Exhibit 21.1, state of origin California. API's home page, read October 10, 2026, says “As Stewart’s wholly owned subsidiary, API provides non-commingled accounts, fidelity bond and Errors & Omissions coverage.” Stewart is listed on the NYSE under the symbol STC and files with the SEC (its latest 10-Q covers the quarter ended June 30, 2026).

The ownership question matters for a reason that is specific to California. Section 51001 of the California Financial Code requires an exchange facilitator to notify existing clients within 10 business days of a change in control (a transfer of more than 50 percent of its assets or ownership), and to post the notice on its website for at least 90 days. If you are mid-exchange and the company changes hands, that is the notice to expect (our reading; the section applies to relinquished property in California, see below).

What Stewart's 10-Ks say about API, and how rarely they name it

We saved 20 annual reports (fiscal 2006 to 2025), the 10-Qs for the second and third quarters of 2008 and the first two quarters of 2026, and the October 2008 8-K. The name “Asset Preservation” appears in the main text of exactly one of them, that 8-K; elsewhere the 10-Ks say “the Company owns a qualified intermediary” (“is a qualified intermediary” for 2006 and 2007, “has qualified intermediaries” for 2008 and 2009). The language has been almost unchanged for twenty years:

• “The Company holds the proceeds from these transactions until a qualifying exchange can occur.” (10-K for 2025, note on contingent liabilities.) The next sentence gives the dollar figure.
• Exchange money is off Stewart's balance sheet: “escrow and Section 1031 exchanger fund accounts are not included in the consolidated balance sheets.”
• The 10-K for 2025 adds that Stewart's qualified intermediary “enters into short-term loan agreements with parties to an exchange in the ordinary course of its business.” The balances sit in other notes payable and are secured by cash on Stewart's balance sheet. Additions and payments were $39.5 million and $74.3 million in 2022, $3.5 million and $5.7 million in 2023, $3.4 million each in 2024, $1.2 million each in 2025, and $2.7 million and $2.8 million in the first six months of 2026, with $0.1 million outstanding at June 30, 2026. The filing does not say what the loans are for.
• The 2025 risk factor on bank failures says that for fiduciary funds, “we perform appropriate account titling and management which leaves the majority of accounts within insured limits.” It does not mention exchange funds by name (our reading is that exchange funds are among the third-party funds it covers).
• The Q2 2026 10-Q gives no new exchange liability figure and points back to Note 15 of the 2025 10-K.

What the filings do not contain: a line for fees or interest earned on exchange funds (compare Fidelity National Financial, which reports it, in our comparison of 1031 exchange companies); the bank or account structure holding exchange money; any mention of a Letter of Assurance; and any statement of which Stewart entity the liability figure covers. Because Exhibit 21.1 also lists Greater Illinois Tax Deferred Exchange Corporation, the “$1.2 billion” could include more than API (our reading; the 10-K does not say).

Twenty years of exchange money: Stewart's contingent liability, 2006-2025

This is the series nobody publishes in one place. Each figure comes from the sentence in Stewart's note on contingent liabilities that ends “This resulted in a contingent liability to the Company of approximately…”, in the paragraph on its qualified intermediary. It measures the money held for exchangers at the year end, not an expected loss.

Read it as a map of the deal cycle. From 2006 to 2009 the figure fell 85%, from $1,189.4 million to $175.3 million (our arithmetic), as the property market stalled, and API's 2008 securities problem happened in the middle of that fall. The 2021 peak of $2.5 billion is about 15 times the 2010 low of $167.9 million. Stewart rounds to $0.1 billion from 2014 to 2022 and again in 2025, so year-to-year changes in those years are indicative only. The point for an exchanger is scale: the money API holds at any time is a number in the hundreds of millions to low billions, which is the right yardstick for any bond or insurance policy it quotes.

2008: what API's exchange account held and how it was resolved

The only API-specific event in Stewart's filings is the auction rate securities (ARS) episode. API's exchanger funds were invested in them, they stopped trading, and the parent stepped in. Stewart's own wording, from the Q2 2008 10-Q: “Since mid February 2008, there has not been a normal market for auction rate securities.”

Four details of the 8-K decide how to read this. First, it describes API as “the Company’s exchanger fund subsidiary” and says the draw was used “by API to purchase auction rate securities from the exchanger fund account at full par value.” In plain terms, the securities moved out of the exchangers' pool and into API, which paid the pool in cash at 100 cents on the dollar. Second, “The Company has guaranteed performance by API under the loan facility.” The parent was on the hook to the bank, not to the exchangers. Third, UBS Bank's remedy was limited to the securities, except on listed “Recourse Events” such as an interest payment default or bankruptcy. Fourth, Stewart's 10-Q says the line was structured so that there was “no anticipated net cost” to it, and the 8-K expected repayment either by transferring the securities to the bank at par or through the UBS settlement with state regulators and the SEC; on June 30, 2010 Stewart used the first route.

The ratio is the part that stays with a reader. $355.0 million of $407.7 million of the exchange money was in a market that had frozen, 87% (our arithmetic), and $119.1 million of it, 34%, was preferred stock of closed-end funds rather than government-backed student loan paper. The liquidity of the exchange pool depended on a market that had stopped, which is why Stewart had to supply cash: $40.2 million advanced to the exchanger funds after June 30 and $79.8 million of liquidity from the credit line. API's account is a record of a QI that was exposed in this way and was made whole by its parent. It is not proof that the next shock would be handled the same way.

The comparison that the 2008 record invites

LandAmerica 1031 Exchange Services (LES), owned by the title insurer LandAmerica, was in the same market with the same paper. Its parent's Q3 2008 10-Q reported $400.7 million of like-kind exchange proceeds at September 30, 2008, of which $290.5 million was in auction rate securities. The same filing splits the funds into $290.5 million in a commingled account and $110.2 million in separate accounts designated by taxpayers. The parent had put about $20.0 million into LES before September 30 and about $45.0 million afterwards. On November 26, 2008, LandAmerica and LES filed Chapter 11 in the Eastern District of Virginia.

Both exchange companies held the same kind of paper; one parent funded the gap and the other filed for bankruptcy within weeks of the quarter end (our reading of the filings; we do not claim the securities alone caused LandAmerica's bankruptcy). For any QI owned by an insurer, the safety question is the parent's, so ask for the parent's promise in writing. Our qualified intermediary guide covers the failures that were fraud rather than market stress.

What API says about itself, and what can be checked

API's website is the only place the Letter of Assurance is described. These are the company's claims as of October 10, 2026, set against what a filing can and cannot confirm.

API's home page calls it a “written” assurance, and the About page says the letter is issued only on request. Both points are things to confirm before you sign the exchange agreement: ask for the letter, read the signatory and the wording, and ask whether it covers the exchange funds, API's investment losses, or only API's contractual performance.

How an exchange with API works, from the rule

The mechanics are set by Treasury regulation, not by API. Under 26 CFR 1.1031(k)-1(g)(4)(iii), a qualified intermediary is a person who “Is not the taxpayer or a disqualified person” and who signs a written exchange agreement and acquires and transfers the properties as that agreement requires. The IRS, in Rev. Proc. 2010-14, restates the clocks: you must identify replacement property within 45 days of the transfer of the relinquished property and acquire it within 180 days. And a QI “is not considered the agent of the taxpayer” for the purpose of deciding whether you received the cash, which is why the money must sit with the QI and not with you. The regulation sets no license, bond or capital requirement for the QI (our reading), so the protections are contractual and, in some states, statutory. Our 1031 exchange rules guide and year-end timeline cover the clocks; API's home page lists three structures it handles (delayed, improvement and reverse exchanges), and our reverse 1031 guide explains the buy-first version.

California law applied to API

API's headquarters is in California, whose Financial Code Division 20.5 (sections 51000 to 51013) took effect on January 1, 2009, after the 2008 episode (Stats. 2008, Ch. 708). We read sections 51000, 51001, 51003, 51005, 51007, 51009 and 51013 on the Legislature's site; the statements below are limited to them.

Two readings follow, both ours. The bond is one number for the whole book. A $1,000,000 bond against Stewart's $1.2 billion exchange liability is under 0.1% (our arithmetic), and if several clients claim, section 51005 reduces the bond with each payment. The bond cannot be the reason to feel safe; the parent is. Out-of-state sales may fall outside the statute. The exclusion for funds from relinquished property outside California, in section 51000, means a sale of a Texas building handled by a California QI may not be covered by the section 51003 floor (the statute also reaches a QI that keeps an office in California to solicit business, so the point is arguable; ask API which state's law its agreement follows). Other states have their own rules, tabled in our qualified intermediary guide.

If a QI fails: the IRS relief, and why it is narrow

IRS Rev. Proc. 2010-14 is the reader's fallback. It says a taxpayer who in good faith used a QI that defaulted and entered bankruptcy or receivership “should not be required to recognize gain from the failed exchange until the taxable year in which the taxpayer receives a payment attributable to the relinquished property.” A payment can come from the QI, its bankruptcy or receivership estate, “the QI’s insurer or bonding company, or any other person.” Two limits: it applies only when the QI “becomes subject to a bankruptcy proceeding under the United States Code or a receivership proceeding under federal or state law”, and it defers tax on money you still hope to recover; it does not return the money. The conclusion for API users is practical: relief of this kind is the end of a bad road, and the question to settle before you start is whether the money is protected from the road.

Is Asset Preservation, Inc. safe? What the record supports

Our reading: the record favors API on the question that failed other QIs in 2008, which is whether a solvent parent will step in, and it is silent on the questions an exchanger signs up to, which are the wording of the parent's promise, where the account is and what you will be paid on the balance. That is a reason to ask for documents, not a reason to avoid API. Nothing here is a rating, and a QI in any other state or under any other parent should be asked the same questions.

What an exchanger can do with this

• Before you sign, ask API for the Letter of Assurance in writing, with the signer's name, the entity that is obligated, and whether it covers the exchange funds, API's investments or only API's performance of the exchange agreement. Ask what happens if API is acquired (California gives you 10 business days' notice of a change in control).
• Ask for the bond and E&O certificates, with insurer names and amounts, and compare them with API's total book (hundreds of millions to billions), not with your own balance. California's floors under Financial Code sections 51003 and 51007 are $1,000,000 and $250,000.
• Ask where the money will sit and how it is titled: a separate account in your name and taxpayer number, or a pooled account; what the investments are (the lesson of 2008); and whether any withdrawal needs your written authorization or notarized signature.
• Ask what you will be paid on the balance and who keeps the rest. Neither API's site nor Stewart's filings give a figure; on a $1,000,000 exchange held 180 days, each 1% of annual interest is about $4,900 (our arithmetic), so the split is worth negotiating.
• Ask which state's law the exchange agreement follows, and whether your relinquished property is in California.
• Keep your own clock. The 45 and 180 days run from your closing whatever the QI does, as our 1031 exchange rules guide explains. If the replacement is a DST, the sponsor's charges are in our DST fee analysis.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 10, 2026: SEC EDGAR filings of Stewart Information Services Corporation (CIK 94344): Forms 10-K for fiscal 2006 to 2025 (0000950129-07-001090, 0000950129-08-001380, 0000950134-09-005240, 0000950123-10-021253, 0000950123-11-021783, 0001193125-12-109948, 0001193125-13-093781, 0001193125-14-077383, 0001628280-15-001257, 0000094344-16-000011, 0000094344-17-000004, 0000094344-18-000007, 0000094344-19-000004, 0000094344-20-000006, 0000094344-21-000009, 0000094344-22-000006, 0000094344-23-000005, 0000094344-24-000005, 0000094344-25-000004, 0000094344-26-000007, with Exhibit 21.1 of the last), Forms 10-Q (0000950129-08-004345, 0000950129-08-005481, 0000094344-26-000013, 0000094344-26-000016) and Form 8-K 0000950129-08-005083; LandAmerica Financial Group Form 10-Q 0001002105-08-000361 and Form 8-K 0001002105-08-000407; the home and About pages of Asset Preservation, Inc. (apiexchange.com); California Financial Code sections 51000, 51001, 51003, 51005, 51007, 51009 and 51013 (leginfo.legislature.ca.gov); 26 CFR 1.1031(k)-1 (eCFR, text as of September 30, 2026); IRS Rev. Proc. 2010-14; and a CourtListener opinion search. Website statements are the company's claims. Percentages, ratios and the interest example are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.