Par Mark A. Paolillo
Par Susan Han
Par Jeff Henshall
With a constant eye on legislative and industry developments, the Ryan Unclaimed Property practice is keenly focused on a new initiative recently launched by the state of Delaware. In November 2023, the Delaware Department of Finance, Office of Unclaimed Property (OUP) began issuing notices to businesses across all sectors requesting that holders complete the state’s verified report process or face further enforcement due to inaction. Given the potential implications of the state’s campaign, the Ryan team has outlined key components of the statutory provision and next steps for addressing this critical request.
Delaware Verified Report Regulation: Key Developments
Based on Section 1170(a) of the Delaware Unclaimed Property Statute, the State Escheator is authorized to require the holder to complete a verified report analysis within 180 days from the date of the notice. A key driver of this development was a June 2022 Delaware Senate Bill, which broadened the scope of Section 1170 by allowing the OUP to call for a verified report from any company—without question and regardless of their compliance profile.
Prior to June 2022, only holders that did not file a report or were believed to have summitted an insufficient, inaccurate, or false filing could be required to provide a verified report. Today, the landscape has changed with the OUP now executing this program with support from third-party audit firms.
Complying with the Verified Report Process: Vital Steps and Considerations
Holders that receive outreach from the Delaware OUP must respond within 30 days of the letter date and acknowledge receipt of the communication and their intent to complete the verified report process. Within 180 days of the notice date, holders are required to provide the following:
- A notarized verified report for the most recent filing years
- A list of the legal entities
- A description and copy (if available) of the companies unclaimed property compliance policies and procedures
Based on our research, it does not appear that extensions will be granted to companies that do not execute the steps referenced above within the specified timeline. Failure to initiate or complete the process within the timeframes outlined by the state would likely result in referral for audit and penalty and interest assessment. Companies in receipt of a verified report notice are not precluded from entering the Delaware Secretary of State Voluntary Disclosure Agreement (VDA) Program—another vehicle for holders pursuing an alternate path to compliance.
If you receive outreach directly from the Delaware OUP or would like more information, contact any of the Ryan unclaimed property experts listed below today.
TECHNICAL INFORMATION CONTACTS:
Mark A. Paolillo
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