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... Continue Reading
Morris Nichols’ Unclaimed Property Counseling Group has advised numerous holders, including Fortune 500 companies, on the various issues arising from compliance with state unclaimed property laws, with a particular focus on defending audits conducted by the State of Delaware and its contract auditors as well as completing voluntary compliance agreements on a multistate basis. Our attorneys have played an integral role in drafting amendments to Delaware’s unclaimed property statutes and Delaware Division of Revenue and Delaware Department of State regulations regarding unclaimed property and audit procedures and voluntary disclosure procedures for holders. We offer extensive knowledge for holders of unclaimed property seeking to appeal audit findings under Delaware’s new administrative review process, which was established by legislation that Morris Nichols’ attorneys also helped draft.
Attorneys
Katherine H. Betterly
Donna L. Culver
Michael Houghton
R. Jason Russell
Barnaby Grzaslewicz
Barnaby Grzaslewicz
Associate
Tel: (302) 351-9416
bgrzaslewicz@mnat.com
Corporate & Business Litigation
Representative Matters
- Engaged by numerous Fortune 500 companies, including manufacturing, insurance, healthcare, oil and gas, and retail companies, under audit by contract auditors on behalf of Delaware and other states.
- Negotiated a comprehensive audit settlement for a Fortune 500 pharmaceutical company.
- Helped resolve a “broken” voluntary disclosure process, resulting in a comprehensive settlement and avoiding a conventional examination by a contract auditor, for a Fortune 1000 manufacturer.
News
Michael Houghton Quoted in The News Journal on Proposed Legislation to Reform Delaware Unclaimed Property Program
Delaware Senate Bill 13 proposes major reforms to the state’s unclaimed property program. The legislation responds to the Delaware District Court’s decision in Temple-Inland and aims to update Delaware law to address reforms developed by the Uniform Law Commission (“ULC”). In an article published by The New Journal titled, “State... Continue Reading
Morris Nichols Unveils Thought Leadership ePub Companions
Wilmington, DE (August 18, 2016) – Morris, Nichols, Arsht & Tunnell LLP, a leader in Delaware law, launched a series of Delaware legal practice ePublications. Available for download on MNAT.com, the ePubs afford the reader convenient access via mobile device or desktop. “This is another example of how we are providing our clients and... Continue Reading
Michael Houghton Quoted in Delaware State News and The News Journal on Temple-Inland Settlement Impact on Delaware Unclaimed Property Program
On Friday, August 5, Delaware and Temple-Inland settled a lawsuit challenging the state’s collection of unclaimed money orders. 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... Continue Reading
Michael Houghton Quoted in The News Journal on Multi-State Unclaimed Property Lawsuit Against Delaware in the United States Supreme Court
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... Continue Reading
Michael Houghton Quoted in The News Journal on SCOTUS Unclaimed Property Opinion
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... Continue Reading
Michael Houghton Quoted in BNA Weekly State Tax Report on Unclaimed Property Lawsuit
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... Continue Reading
Michael Houghton Quoted in BNA Weekly State Tax Report’s 2016 Legislative Preview on Unclaimed Property in Delaware
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... Continue Reading
Michael Houghton Quoted by AP on Uniform Law for Unclaimed Property
Morris Nichols partner Michael Houghton was quoted by The Associated Press in the article entitled “State Unclaimed Property Laws: Discord and Disparities” which discusses recent efforts by the Uniform Law Commission’s Drafting Committee to Revise the Uniform Unclaimed Property Act. Mike co-chairs this ULC revision committee and expressed... Continue Reading
Michael Houghton Quoted in BNA’s Daily Tax Report on Delaware Unclaimed Property Reform
Morris Nichols partner Michael Houghton was quoted in the BNA Daily Tax Report article entitled “Delaware Governor Signs Legislation to Overhaul Unclaimed Property Program.” He explains that the new law, signed by Delaware Gov. Jack Markell on July 22, 2015, implements two “earth-moving” changes—new and shorter audit look-backs and a... Continue Reading
Michael Houghton Quoted in State Tax Today
The Delaware Unclaimed Property Task Force is set to release its final recommendations for the state’s unclaimed property enforcement processes before Christmas. Morris Nichols partner Michael Houghton serves on the current task force and also served on Delaware’s previous task force in 2007. He provided commentary and perspective... Continue Reading
Mike Houghton Quoted in The New York Times
As the 2014 fiscal year comes to a close, the state of Delaware released the annual index on unclaimed property this week. Today, The New York Times explored growing unclaimed property across the country in the article titled, “Lost Money Everywhere, Just Waiting to Be Claimed.” The Times turned to “unclaimed property... Continue Reading
Mike Houghton quoted in Delaware Law Weekly regarding Delaware's enactment of the Uniform Law Commission version of the Fiduciary Access to Digital Assets Act
There have been a series of recent articles in The Wall Street Journal, the Washington Post and other national news outlets discussing Delaware’s leadership in enacting legislation designed to provide fiduciaries with access to the online accounts and digital content belonging to individuals who have died or become incapacitated, access which has... Continue Reading
Delaware's Unclaimed Property Program and It's Impact on Delaware's Reputation in the National Business Community
Wilmington, DE (May 20, 2014) – Michael Houghton, a Morris Nichols Commercial Law Counseling Group partner and member of the firm’s Executive Committee, was recently quoted in the News Journal article titled, “State Clashes Over Money with Businesses it Courts.” The article discussed Delaware’s abandoned property program and perception... Continue Reading
Michael Houghton, Walter Tuthill, Author Unclaimed Property Treatise for BNA Corporate Practice Series
Wilmington, DE (January 24, 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. The treatise provides a comprehensive analysis of the law of unclaimed property and taps... Continue Reading
Michael Houghton Elected President of The National Conference of Commissioners on Uniform State Laws
Wilmington, DE (July 13, 2011) – Morris Nichols banking, regulatory and commercial law counseling partner and Best Lawyers 2009 Delaware Banking Lawyer of the Year Michael Houghton has been elected President of The National Conference of Commissioners on Uniform State Laws (Uniform Law Commission (ULC)). The two-year appointment was made at the... Continue Reading
BusinessWeek Quotes Michael Houghton: Delaware Among States Eyeing Unclaimed Property
Wilmington, DE – November 29, 2010 – Michael Houghton, Morris Nichols banking, regulatory and Commercial Law Counseling Group partner and Best Lawyers’ 2009 Banking Lawyer of the Year was quoted in The Associated Press article entitled Delaware Among States Eyeing Unclaimed Property published today in Bloomberg’s BusinessWeek. The article... Continue Reading
Michael Houghton Quoted in Delaware Law Weekly: Provides Perspective on Delaware's Changes to Its Unclaimed Property Statute
Wilmington, DE – August 11, 2010 – Michael Houghton, Morris Nichols banking, regulatory and Commercial Law Counseling Group partner and Best Lawyers’ 2009 Banking Lawyer of the Year was quoted in the lead article Revamped Law on Unclaimed Property Seeks New Balance published today in Delaware Law Weekly. The article reviews the recent... Continue Reading
Events
UPPO 2019
The Unclaimed Property Professionals Organization holds its annual conference from March 24-27, 2019 in New Orleans, La. Morris Nichols partner Kate... Continue Reading
UPPO Webinar: Policies and Procedures
The Unclaimed Property Professionals Organization hosts a webinar on developing, maintaining and using comprehensive unclaimed property policies and... Continue Reading
Webinar: Unclaimed Property Fundamentals: Filing (The Unclaimed Property Reporting Cycle)
Managing the unclaimed property compliance function including the continuously changing state statutes can be a gruesome task. In-depth reviews as... Continue Reading
Webinar: Unclaimed Property Fundamentals: Delaware Secretary of State Voluntary Disclosure Program
The extensive and complex requirements of the Delaware Secretary of State Voluntary Disclosure Agreement Program (“DE VDA”) means that conducting... Continue Reading
UPPO 2017
The Unclaimed Property Professionals Organization holds its annual conference from March 19 to 22, 2017 in Austin, Texas. Morris Nichols partner... Continue Reading
UPPO Webinar: Delaware S.B. 13: What’s Next?
The Unclaimed Property Professionals Organization hosts the webinar, “Delaware S.B. 13: What’s Next?” at 1:00 p.m. EST on February 14, 2017.... Continue Reading
UPPO Lunch ‘n Learn – Silicon Valley
The Unclaimed Property Professionals Organization presents a lunch ‘n learn session on November 16, 2016 in San Jose, Calif. Morris Nichols partner... Continue Reading
Webinar: Unclaimed Property Risks: Reporting Doesn’t Ensure Full Compliance
For many organizations, filing annual unclaimed property reports and escheating eligible property is the extent of their compliance program. However,... Continue Reading
SFOF 2016 Spring National Meeting
The State Financial Officers Foundation hosts the 2016 Spring National Meeting from April 14 to 15, 2016 in Indianapolis, Ind. Morris Nichols partner... Continue Reading
UPPO 2016
The Unclaimed Property Professionals Organization holds its annual conference from March 20 to 23, 2016 in Palm Spring, Calif. Morris Nichols partner... Continue Reading
UPPO 2015
The Unclaimed Property Professionals Organization will hold its annual conference from March 8 to 11, 2015 in Orlando, Fla. Morris Nichols... Continue Reading
CSC Abandoned Property Compliance Webinar
Morris Nichols partner Michael Houghton will co-present a webinar on abandoned property compliance with the Honorable Jeffrey W. Bullock, Delaware... Continue Reading
2012 UPPO Annual Conference
Michael Houghton, Morris Nichols Commercial Law Counseling Group partner, and Brenda Mayrack, Commercial Law Counseling Group associate, will serve as... Continue Reading
2011 UPPO Annual Conference
Michael Houghton, Morris Nichols Banking, Regulatory and Commercial Law Counseling Group partner and Best Lawyers 2009 Banking Lawyer of the Year, and... Continue Reading
Articles
Unclaimed Property: A Delicate Balance for Delaware — Enforcing the Law in the Face of Ongoing Legal Challenges and Economic Uncertainty
Unclaimed property is an arcane concept, a modern outgrowth of ancient legal principles. These principles, as recognized in a series of U.S. Supreme Court opinions, provide the State the right to take custody of abandoned property – uncashed...
Unclaimed Property: Holder Beware
R. Jason Russell, Morris Nichols Commercial Law Counseling Group partner, and associate Barnaby Grzaslewicz, co-authored "Unclaimed Property: Holder Beware" for Practical Law Company’s Practice Note series.
Unclaimed Property―Voluntary Disclosure Agreements
A voluntary disclosure agreement program, also known as a VDA, is a program through which a holder can report on a voluntary basis its overdue unclaimed property. Commonly offered by states to encourage holders to come into compliance with their...
Unclaimed Property
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. The treatise provides a...
Liability Exposure for Delaware Incorporated Companies – The Risk of an Escheat Audit and Delaware’s New Voluntary Disclosure Program to Avoid Penalties
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...
Delaware Makes Significant Changes to Its Unclaimed Property Statute
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...
‘McKesson’ Part II – State’s Response Offers Insight, Guidance To Holders Facing Audit for Inventory and Other Property Types
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...
McKesson Corporation Lawsuit Challenges Delaware’s Assessment of Unclaimed Property Liability For Inventory Mismatches
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...
Client Alerts
Delaware Overreach? Chancery Criticizes Delaware’s Unclaimed Property Audit Program, Limits Information Holders Must Produce and Places Burden on the State to Show Voided Checks Are Unclaimed Property
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...
State of Delaware Provides Additional 30 Days—Until July 18, 2020—for Companies to Enter Its Voluntary Disclosure Program: Audit Notices Will Be Sent to Those Who Do Not Enter the Program
Virtually all companies generate unclaimed property. This type of property includes unclaimed payroll or accounts payable checks, unapplied customer credits, and unclaimed dividends or shares. Under laws that exist in every state, property that is...
Court of Chancery Holds Delaware Has the Power to Compel Holders to Produce Information Sought in Unclaimed Property Audits
On May 21, 2020, the Delaware Court of Chancery issued an opinion 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...
Delaware Extends Deadline to Respond to February 2020 VDA Invitations
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...
New Unclaimed Property Litigation Filed Against the State of Delaware Does Not Delay Another Round of VDA Invitations
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...
Unclaimed Property Audit Alert: New Round of Delaware Voluntary Compliance “Invitations” Will Be Issued This Week
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...
Be On Alert—State of Delaware Ramps Up Unclaimed Property Enforcement
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...
Significant Changes To Delaware Unclaimed Property Laws With Important Dates Approaching
Delaware enacted a major overhaul of its unclaimed property statute on February 2, 2017 as Senate Bill 13, which was later amended by Senate Substitute No. 1 for Senate Bill 79 on June 29, 2017 (the “New Act”). The New Act affects companies...
Major Changes to Delaware’s Unclaimed Property Practices Underway, as Governor Signs Senate Bill 13 into Law
On February 2nd, 2017, Governor John Carney signed into law Senate Bill 13 (“S.B. 13”) which rapidly passed through both the Delaware Senate on January 19th, and the Delaware General Assembly on January 26th. S.B. 13, which is a major overhaul of...
Major Reforms Proposed in Unclaimed Property Legislation Introduced in Delaware Senate
Senate Bill 13, cosponsored by Senator Bryan Townsend and Representative Bryon Short, on January 12, 2017, is a major overhaul of Chapter 11, Title 12 of the Delaware Code, Delaware’s unclaimed property statute, and is aimed at both updating...
Constitutional Challenge to Delaware’s Unclaimed Property Law Dismissed on Standing/Ripeness Grounds
On August 16, 2016, the United States District Court for the District of Delaware issued an opinion in the case of Plains All American Pipeline, L.P. v. Cook, Civ. No. 15-468-RGA, granting defendants’ motions to dismiss federal Constitutional...
Delaware District Court Rules That Delaware’s Unclaimed Property Audit Process Violates Substantive Due Process Constitutional Rights
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...
Governor Markell Signs Second Leg of Unclaimed Property Reform Legislation into Law
On July 22, 2015, Delaware Governor Jack Markell signed Senate Bill No. 141 into law. The bill was introduced in the Delaware State Senate on June 16, 2015 and passed the Delaware House in the early morning hours of July 1, 2015. The speed with...
Second Leg of Unclaimed Property Reform Legislation Passed by the Delaware Legislature
On June 16, 2015, Senate Bill No. 141 was introduced in the Delaware State Senate. In the early morning hours of July 1, 2015 (with the Delaware “legislative calendar” still reading June 30, 2015) this legislation, which had already passed the...
Second Leg of Unclaimed Property Reform Legislation Introduced in Delaware 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 second of two bills...
Court Declines to Dismiss Constitutional Challenge to Delaware’s Unclaimed Property Law
On March 11, 2015, the United States District Court for the District of Delaware issued an opinion and order denying, in large part, the State of Delaware’s motion to dismiss a lawsuit challenging, on federal constitutional grounds, Delaware’s...
Delaware Enacts First Leg of Unclaimed Property Reform Legislation
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...
Pending Legislation to Amend Delaware’s Unclaimed Property Statue Would Create Additional Incentive for Holders to Participate in New Voluntary Disclosure Program
House Bill 2 extends filing period and expands scope of eligible holders.
Delaware Governor Jack Markell Signs Into Law Senate Bill 258, Creating a Three-Year Voluntary Disclosure Opportunity for Holders of Unclaimed Property Managed by the Delaware Secretary of State
New program features shorter look-back periods and reprieve from audit for participating holders. Proposed regulation would shorten look-back period for pending audits.
Amended Version of Senate Bill 258 Passes Delaware State Unanimously
Legislation would create a three-year voluntary disclosure opportunity for holders, managed by the Secretary of State, featuring “look-back” periods shortened by up to five years and reduced risk of audit for participants.