Unclaimed Property

Bill Lafferty and Michael Houghton both appear on the 2025 list.

Donna Culver speaks on the unclaimed property panel “Both Sides Now: State-Holder views on Recent Legal Decisions.”

Kate Betterly will present her experiences and what she took away from the 2024 UPPO Annual Conference.

Kate Betterly, Jason Russell, and Donna Culver will co-present sessions at the UPPO Annual Conference.

Bill Lafferty and Mike Houghton have been named to the Delaware Business Times' innagural “Delaware 222” list of impactful leaders in the First State.

Donna Culver will co-present the session, “Legalese for Non-Lawyers” at the UPPO Annual Conference.

Kate Betterly will co-present a webinar on Self-Audits.

The 2022 edition of U.S. News - Best Lawyers “Best Law Firms” ranks Delaware law firm Morris Nichols in 25 areas.

Morris Nichols partners Michael Houghton and Donna Culver will join members of Ernst & Young LLP’s Unclaimed Property and Escheat Services practice for a 60-minute webcast addressing the current unclaimed property landscape.

Jason Russell will co-facilitate the upcoming UPPO Industry Focus Conference Call for Securities.

Morris Nichols teams with the KPMG National Unclaimed Property practice for a 60-minute unclaimed property webcast.

Morris Nichols and Ryan LLC discuss the current unclaimed property litigation, audit, and voluntary compliance landscape and potential winds of change that will likely carry over into 2021 and beyond.

Morris Nichols partners, Jason Russell and Jim Honaker, will serve as presenters. Jason will speak on “Recent Developments in Unclaimed Property in Delaware.” Jim will present the session “Recent Statutory Amendments to the DGCL.”

Designed for the unclaimed property professional and companies involved in Delaware unclaimed property audits and voluntary disclosure agreements, Morris Nichols’ Unclaimed Property Companion contains essential reference documents on Delaware and national unclaimed property law.

While not binding on the Court, the recommendation, if accepted, would allow Delaware to Retain hundreads of millions of dollars in MoneyGram teller checks escheated to it as MoneyGram's state of incorporation.

In a pair of bills introduced late last week in the Delaware General Assembly, Delaware moved to shore up its unclaimed property program through proposed amendments to its unclaimed property law that would establish unclaimed property reporting requirements for virtual currency, and create a permanent expedited audit option with significantly reduced interest for holders.  Additionally, in apparent reaction to several recent court opinions criticizing the State’s use of contingent fee audit firms, and curtailing the State’s ability to compel the production of holder records, the proposed amendments would eliminate most third-party contingent fee arrangements, and expand the State’s authority to seek records – from the holder and various third-parties – wholly unrelated to the identification of abandoned property due and owing to the State.

As many American businesses continue to function remotely, Delaware – like other states – has concluded that VDAs and unclaimed property audits initiated by Delaware can and should continue as well. Therefore, it is accelerating its scrutiny of Delaware formed companies.

This article discusses the bankruptcy discharge process and how prospective acquirors of bankrupt companies can identify and potentially avoid liability for legacy unclaimed property liabilities that may remain following confirmation of a plan of reorganization.

The Delaware Secretary of State announced in late August 2020 that his office was mailing nearly 200 letters to businesses identified as “holders” of unclaimed property. These Delaware-formed companies were deemed likely to be out of compliance in reporting dormant, abandoned or unclaimed property under Delaware law.

Earlier this month, the Delaware Court of Chancery issued an opinion in Department of Finance v. AT&T, Inc., C.A. No. 2019-0985-JTL (Del. Ch., July 10, 2020). The opinion itself is narrow in scope but its result, and several of its findings regarding Delaware’s administration of its unclaimed property program, should be assessed carefully by holders and their advocates. The opinion may impact pending or new audits in two important ways.

On June 18, 2020, the administrators of Delaware’s unclaimed property program sent letters to companies who failed to respond to a February 2020 invitation to enroll in the Delaware Secretary of State's voluntary disclosure agreement (“VDA”) program establishing July 18, 2020 as the final date to enter the voluntary program prior to being placed under audit by the Department of Finance.

On May 21, 2020, the Delaware Court of Chancery issued an opinion in Univar denying a holder’s ripeness challenge to an administrative subpoena for documents issued by the Delaware Department of Finance pursuant to the amended provisions of the State’s abandoned and unclaimed property law.

For Delaware, the legal home to thousands of “holders,” collection of, and fiscal reliance on, unclaimed property has always been tricky.

On February 20, 2020, Delaware’s VDA Administrator mailed invitations to enter into the State’s Abandoned and Unclaimed Property Voluntary Disclosure Agreement Program (“VDA Program”) to more than 100 companies identified as likely being out of compliance with Delaware’s Unclaimed Property Laws. By statute, an invitee has 60 days from the invitation’s mailing to enroll in the VDA Program or the company will be referred to the State Escheator for audit.

The State of Delaware’s unclaimed property program faces continued legal challenges from the holder community.  In December 2019 alone, four new holders filed complaints in the U.S. District Court for the District of Delaware raising a series of constitutional challenges to Delaware’s conduct of its unclaimed property audits. 

On Monday, May 20th, the Delaware Secretary of State issued a notice announcing that the State will distribute letters this week inviting companies to enter the Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program (“VDA Program”).  This is a continuation of the State’s heightened enforcement initiative that we highlighted earlier this year.  We believe this round of invitations will be targeted at privately held Delaware incorporated companies with an apparent history of little or no prior reporting of unclaimed property to Delaware.

For those who thought the State of Delaware had gone out of the unclaimed property business - think again. After a 2017 overhaul of Delaware’s unclaimed property laws and an increased emphasis on voluntary compliance with those laws, Delaware is sending out dozens of “invitations” to companies to enter its Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program (the “VDA Program”).

Delaware enacted a major overhaul of its unclaimed property statute on February 2, 2017. The New Act affects companies currently under audit, companies in the Delaware voluntary disclosure program (a “VDA”) and any other companies that have unclaimed property reporting obligations to Delaware.

Now enacted, Senate Bill 13 alters the Delaware unclaimed property landscape significantly, and holders should make sure to give it a close review.

If enacted, Senate Bill 13 will overhaul the Delaware unclaimed property landscape significantly, requiring close attention from holders.

In Plains All American Pipeline, L.P. v. Cook, the Court ruled on a holder’s standing to sue third party contract auditors, the ripeness of challenges to unclaimed property audit methodologies (including estimation), and the constitutionality of the State’s selection of holders for audit.

This article discuss the availability and specifics of these programs in seven states.

On June 28, 2016, the United States District Court for the District of Delaware issued an opinion in the case of Temple-Inland, Inc. v. Cook, Civ. No. 14-654-GMS, granting in part and denying in part cross motions for summary judgment filed by the State of Delaware (the “State”) and Temple-Inland, Inc. (the “Company”). Significantly, the Court granted the Company’s claims that the State’s audit conduct violates substantive due process rights under the United States Constitution. Declining the State’s invitation to abstain from deciding the case pending a review by a Delaware state court of the statute allowing for the extrapolation and estimation of liability for periods for which a holder lacks records, the Court held that the combined effect of several aspects of the State’s executive actions created a game of “gotcha” which “shocks the conscience.”

The speed with which this legislation passed indicates that Delaware is serious about reforming its Unclaimed Property Program.

On June 16, 2015, Senate Bill No. 141 was introduced in the Delaware State Senate.

On June 16, 2015, Senate Bill No. 141 was introduced in the Delaware State Senate.  This bill proposes what may well be the most important statutory changes ever made to the existing Delaware Unclaimed Property Program. 

The US District Court for the District of Delaware issued an opinion in Temple-Inland, Inc. v. Cook and order denying, in large part, the State of Delaware’s motion to dismiss a lawsuit challenging, on federal constitutional grounds, Delaware’s methodology for determining unclaimed property liability for periods in which the holder’s records are insufficient to determine the actual amounts due.

Earlier today, the Delaware General Assembly passed, and Governor Jack Markell signed into law, Senate Bill No. 11, with Senate Amendment No. 2, which implements, in part, the recommendations of a Legislative Task Force established by the Delaware General Assembly last year to review and suggest reforms to Delaware’s Unclaimed Property Program.

Jeff Wolters, Morris Nichols Corporate Law Counseling Group partner, and Mike Houghton, Morris Nichols Unclaimed Property Law Counseling Group partner, co-authored Liability Exposure for Delaware Incorporated Companies - The Risk of an Escheat Audit and Delaware’s New Voluntary Disclosure Program to Avoid Penalties  appearing in the April 2013 issue of TerraLex Connections.