Unclaimed Property
PDFMorris Nichols played an integral role in shaping Delaware’s unclaimed property law—from helping draft the state’s statutes and regulations to its relevant audit and voluntary disclosure procedures. In addition, Morris Nichols is involved with unclaimed property at the national level and participated in drafting the Uniform Unclaimed Property Act, which was adopted by the Uniform Law Commission in 2016 when a Morris Nichols partner served as President of the Uniform Law Commission.
We represent clients who need to defend audits conducted by Delaware, its contract auditors, and other states. We also advise clients on voluntary disclosure and compliance programs with Delaware and other states and provide general guidance concerning unclaimed property law. Morris Nichols has served as unclaimed property counsel to over 200 companies, including many Fortune 500 companies and in a variety of industries, including, oil and gas, retail, manufacturing, hotel and restaurant, entertainment, video games, aerospace, private equity, banking and financial services.
News
Jason Russell will co-facilitate the upcoming UPPO Industry Focus Conference Call for Securities.
- Webinar, Webinar, 12.09.2020
Morris Nichols teams with the KPMG National Unclaimed Property practice for a 60-minute unclaimed property webcast.
- Speaking Engagement, Webinar, 11.17.2020
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.
- Speaking Engagement, Virtual, 11.17.2020
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.”
- Speaking Engagement, New Orleans, Louisiana, 03.24.2019 Through 03.27.2019
- Speaking Engagement, Webinar, 08.08.2018
- Speaking Engagement, Webinar, 06.13.2018
- Webinar, 12.19.2017
- Speaking Engagement, Austin, Texas, 03.19.2017 Through 03.22.2017
- Speaking Engagement, Webinar, 02.14.2017
- Media Mention, Bloomberg BNA, 02.06.2017
In an article titled, “Delaware Revamps Unclaimed Property After Lawsuits,” Morris Nichols partner Michael Houghton spoke with Bloomberg BNA about unclaimed property legislation enacted by Delaware Gov. John Carney on February 2, 2017. “This is an absolute and complete revision of the Delaware law,” he said. “The entire Delaware unclaimed program statute has been rewritten.”
- Media Mention, The News Journal, 01.19.2017
In an article published by The New Journal titled, “State Overhauling Unclaimed Property Law,” Morris Nichols partner and ULC drafting committee co-chair Michael Houghton described the legislation as a step in the right direction. “My view is that it is not perfect, but I don’t want perfect to be the enemy of the good,” Houghton said. “And it’s good in many respects.”
- Speaking Engagement, San Jose, California, 11.16.2016
- Webinar, Webinar, 09.29.2016
- Media Mention, Delaware State News and The News Journal, 08.09.2016
Morris Nichols partner Michael Houghton spoke with Delaware State News and The News Journal regarding the consequences of the litigation and the settlement, noting this and other lawsuits challenging the state’s unclaimed property practices “continue to cast a real cloud over the Delaware program.”
- Media Mention, The News Journal, 06.10.2016
A coalition of states has filed a lawsuit against Delaware challenging the state’s collection of more than $150 million of unclaimed money orders in the United States Supreme Court. Morris Nichols partner Michael Houghton spoke with The News Journal regarding potential effects for the First State in the article entitled, “Money Order Lawsuit Could Impact State Budget.” Mike has advised Fortune 500 companies and others on unclaimed property issues for more than 25 years. He is co-chair of the Uniform Laws Commission Drafting Committee to Revise the Uniform Unclaimed Property Act.
- Speaking Engagement, Indianapolis, Indiana, 04.14.2016 Through 04.15.2016
- Speaking Engagement, Palm Spring, California, 03.20.2016 Through 03.23.2016
- Media Mention, The News Journal, 03.09.2016
Morris Nichols partner Michael Houghton spoke with The News Journal about a recent U.S. Supreme Court discussion on unclaimed property which cited Delaware as an example of concerns with unclaimed property owner notifications. Mike has advised Fortune 500 companies and others on unclaimed property issues for more than 25 years and is a member of a Legislative Task Force currently examining, and making recommendations concerning, Delaware’s Unclaimed Property program. He is also co-chair of the Uniform Laws Commission Drafting Committee to Revise the Uniform Unclaimed Property Act. In the article, entitled “Supreme Court Calls Out Delaware on Unclaimed Property,” Mike comments on a recent concurring opinion issued by two U.S. Supreme Court Justices which suggests some states - including Delaware - may not be satisfying due process requirements in how they undertake to reunite owners of unclaimed property, remitted to the states, with that lost property.
- Media Mention, Weekly State Tax Report, 03.04.2016
Morris Nichols partner Michael Houghton contributed comments to the BNA Weekly State Tax Report article entitled “Pennsylvania Sues Delaware, MoneyGram for $10.3 Million in Uncashed Checks.” Mike has advised Fortune 500 companies and others on unclaimed property issues for more than 25 years and told Bloomberg BNA the case is “extremely unusual.” He observed that the lawsuit was filed directly against Delaware State Escheator David Gregor, although the dispute appears to lie between the two states. He noted his skepticism that such a dispute, effectively between two states, could be successfully pursued “in a federal district court in Pennsylvania,” noting “I don’t know how that’s sustainable.”
- Media Mention, BNA Weekly State Tax Report, 01.01.2016
Morris Nichols partner Michael Houghton contributed comments to the BNA Weekly State Tax Report article entitled “Unclaimed Property, New Revenue, in Focus in Delaware: Legislative Preview.” He noted that unclaimed property is the third-largest revenue source for Delaware and commented that some of the state’s unclaimed property laws are being challenged in court.
- Media Mention, Associated Press, 10.17.2015
- Media Mention, BNA’s Daily Tax Report, 07.30.2015
- Speaking Engagement, Orlando, Florida, 03.08.2015 Through 03.11.2015
- Media Mention, State Tax Today, 12.22.2014
- Media Mention, The New York Times, 10.31.2014
- Media Mention, Delaware Law Weekly, 08.27.2014
- Speaking Engagement, Webinar, 06.11.2014
- Media Mention, The News Journal, 05.20.2014
- 01.24.2014
- Orlando, FL, 03.11.2012 Through 03.14.2012
- Michael Houghton Elected President of The National Conference of Commissioners on Uniform State Laws07.01.2011
- San Antonio, TX, 03.06.2011 Through 03.09.2011
- 11.01.2010
- 08.01.2010
Insights
- Client Alert, 02.19.2021
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.
- Article, Bloomberg Law, 12.21.2020
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.
- Delaware Unclaimed Property Audit Notices to Be Issued Within Days: Privately Held Companies a FocusClient Alert, 11.11.2020
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.
- Client Alert, 07.25.2020
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.
- Client Alert, 06.22.2020
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.
- Client Alert, 05.26.2020
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.
- Article, Delaware Business magazine, May/June 2020
For Delaware, the legal home to thousands of “holders,” collection of, and fiscal reliance on, unclaimed property has always been tricky.
- Client Alert, 04.03.2020
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.
- Publication, 03.01.2020
Designed for the unclaimed property professional and companies involved in Delaware unclaimed property audits and voluntary disclosure agreements, the Morris Nichols Unclaimed Property Companion is the authority on Delaware unclaimed property law.
- Client Alert, 02.20.2020
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.
- Client Alert, 05.21.2019
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.
- Client Alert, 03.11.2019
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”).
- Client Alert, 10.11.2017
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.
- Article, Practical Law Journal, 05.2017
- Client Alert, 02.02.2017
Now enacted, Senate Bill 13 alters the Delaware unclaimed property landscape significantly, and holders should make sure to give it a close review.
- Client Alert, 01.12.2017
If enacted, Senate Bill 13 will overhaul the Delaware unclaimed property landscape significantly, requiring close attention from holders.
- Constitutional Challenge to Delaware’s Unclaimed Property Law Dismissed on Standing/Ripeness GroundsClient Alert, 08.18.2016
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.
- Article, Tax Management Weekly State Tax Report, 07.01.2016
This article discuss the availability and specifics of these programs in seven states.
- Client Alert, 06.30.2016
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.”
- Client Alert, 07.24.2015
The speed with which this legislation passed indicates that Delaware is serious about reforming its Unclaimed Property Program.
- Client Alert, 07.01.2015
On June 16, 2015, Senate Bill No. 141 was introduced in the Delaware State Senate.
- Client Alert, 06.16.2015
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.
- Client Alert, 03.16.2015
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.
- Client Alert, 01.29.2015
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.
- Publication, Bloomberg BNA, 2014
Michael Houghton and Walter Tuthill, Morris Nichols Commercial Law Counseling Group partners, served as co-authors of the revised Bureau of National Affairs (BNA) Corporate Practice Series Portfolio: Unclaimed Property.
- Article, 04.02.2013
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.
- Article, 07.28.2010
Michael Houghton, Morris Nichols banking, regulatory and Commercial Law Counseling Group partner and Best Lawyers 2009 Banking Lawyer of the Year, and Commercial Law Counseling Group associate Brenda Mayrack, authored Delaware Makes Significant Changes to Its Unclaimed Property Statute, published in the July 28, 2010 issue (Vol. 25, No. 29) of BNA’s Corporate Counsel Weekly.
- Article, 12.30.2009
Morris Nichols banking, regulatory and commercial law counseling partner and Best Lawyers 2009 Banking Lawyer of the Year Michael Houghton, and Commercial Law Counseling Group associate Brenda Mayrack, authored ‘McKesson’ Part II - State’s Response Offers Insight, Guidance To Holders Facing Audit for Inventory and Other Property Types, published in the December 30, 2009 issue (Vol. 24, No. 49) of BNA’s Corporate Counsel Weekly. Samuel Schaunaman, Esq. of Thomson Reuters co-authored.
- Article, 11.04.2009
Morris Nichols banking, regulatory and commercial law counseling partner and Best Lawyers 2009 Banking Lawyer of the Year Michael Houghton, and Commercial Law Counseling Group associate Brenda Mayrack, authored McKesson Corporation Lawsuit Challenges Delaware’s Assessment of Unclaimed Property Liability For Inventory Mismatches published in the November 4, 2009 issue (Vol. 24, No. 42) of BNA’s Corporate Counsel Weekly. Samuel Schaunaman, Esq. of Thomson Reuters co-authored.
Professionals
Related Areas
Delaware Unclaimed Property Companion
Morris Nichols’ Delaware Unclaimed Property Companion is a practical resource for those engaged in a Delaware unclaimed property audit or voluntary disclosure, as well as to those who may want to know more about Delaware’s unclaimed property laws, regulations, and procedures.MORE
"Unclaimed Property: A Delicate Balance for Delaware - Enforcing the Law in the Face of Ongoing Legal Challenges and Economic Uncertainty"
In this Delaware Business Magazine article, Morris Nichols partners Katherine Betterly and Michael Houghton examine the tightrope Delaware walks as it balances its reputations as as the “corporate capital of the world” with its pursuit of unclaimed property.MORE