Real Estate Law - Escrow

You should first make sure that the actual title company, as opposed to a parent holding company, has filed bankruptcy. Bankruptcy Code §109(b) excludes domestic insurance companies from the type of business eligible to file bankruptcy. This prohibition would include title companies unless there is something unusual about the manner in which California regulates this industry. If it is the holding company rather than the title company itself in bankruptcy, your ability to recover money place in escrow will be determined by the terms of the contract under which the funds were deposited.
Although title companies generally cannot file bankruptcy, they can be placed into receivership by the state agency having supervision over insurance companies. These agencies may place an insurer into receivership under the law of the state having authority over them when certain financial criteria are not maintained, or other events happen. While these procedures are similar to those found in a bankruptcy, they are based on state rather than federal bankruptcy law, and are not quite the same.
If it is the holding company rather than the title company itself in bankruptcy, and the title company is not in receivership, your ability to recover money place in escrow will be determined by the terms of the contract under which you deposited the funds. If the title company is in receivership, you will need to determine the procedures established by the oversight agency for making a claim. However, if the funds are held in a true escrow account, they should be segregated from funds belonging to the title company itself and remain recoverable by the party entitled to payment from the escrow account under the terms of the escrow contract.